The Smartest Dividend Stocks to Buy With $5,000 Right Now

Investors load up on dividend stocks because they want passive income. Many dividend-paying corporations send shareholders cash distributions each quarter and hike their payouts each year.

While you can take cash right away, many investors opt to reinvest their dividends, guaranteeing higher payouts each time. Then, they have plenty of cash flow by the time they retire.

If you have $5,000 floating around that you want to put into dividend stocks, here are two strong contenders. One of them qualifies with a low yield but a tremendous dividend growth rate. The other pick has a high yield right now and is one of the few dividend stocks that pays monthly cash distributions to its shareholders.

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American Express is a financial giant

American Express (AXP 1.24%) has been one of the top credit card issuers for decades. That history makes it easier for the company to gain market share and earn revenue from more transactions. This business model has also been enough to crush the S&P 500, with the stock up by about 160% during the past five years.

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NYSE: AXP

American Express

Today’s Change

(-1.24%) $-4.29

Current Price

$341.95

Key Data Points

Market Cap

$235B

Day’s Range

$338.27 - $345.38

52wk Range

$220.43 - $387.49

Volume

2

Avg Vol

2.8M

Gross Margin

60.65%

Dividend Yield

0.96%

It only offers a 0.95% yield at current levels, so it isn’t exactly a high-dividend stock. But management said it planned to raise the dividend by 16% this year, and those types of increases are quite common for the company. American Express also has a strong financial profile that supports such dividend hikes.

The company generated $2.5 billion in net income in the 2025 fourth quarter, a 13% increase from a year earlier. That’s a little more than the $2.3 billion in dividends it paid to shareholders during all of 2025. Management also had enough financial flexibility to buy back $5.3 billion worth of shares that year.

Realty Income offers steady cash flow with its vast real estate portfolio

Realty Income (O +0.65%) is a diversified real estate investment trust (REIT) that owns about 15,500 properties across 92 separate industries. This portfolio covers all 50 states and several European countries. Because real estate relies on monthly cash flow, Realty Income has an easy time paying out monthly dividends to its investors.

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NYSE: O

Realty Income

Today’s Change

(0.65%) $0.42

Current Price

$65.50

Key Data Points

Market Cap

$60B

Day’s Range

$64.87 - $65.69

52wk Range

$50.71 - $66.73

Volume

31

Avg Vol

6.6M

Gross Margin

48.14%

Dividend Yield

4.93%

The REIT normally doesn’t beat the S&P 500, and its 10% gain during the past five years is a testament to that fact. However, the stock has started the year strong with a 15% year-to-date gain. Results for the third quarter of 2025 showed 10% year-over-year revenue growth and rising profit margins. A 98.7% occupancy rate for its properties tied everything together with a nice bow.

Even with the stock’s strong start to the year, Realty Income still offers a dividend yield of 5%. Shareholders can reinvest their cash distributions each month to ensure higher dividend payouts in the future.