3 Dividend Stocks to Buy Today for $500

Because many brokers offer commission-free trading, there is virtually no minimum amount of cash you can put into the stock market. Whether you invest a few hundred dollars or a few thousand dollars, you can benefit from the historically strong returns of a diversified portfolio of high quality stocks held over many years.

Dividend stocks are a good choice for investors who want to invest less money because they provide immediate passive income and can be reinvested automatically, allowing you to slowly accumulate more shares over time. If you choose to hold on to some great companies, the process can pay off handsomely over decades.

With that goal in mind, let's look at a few dividend-paying stocks with excellent long-term potential at a cost of less than $500 per share.

1. Home Depot

Being the best in an industry is really rewarding - ask!Home Depot ( Home Depot ) (NYSE: HD)Just know. This home improvement giant is far more profitable than its closest competitorLowe'It is also able to expand sales at a faster rate in both up and down markets. Home Depot also generates significant cash flow and has a higher rate of return on invested capital. Being a market share leader is a good thing.

In addition, the company offers a more generous dividend. Compared to Lloyd's 1.8% dividend yield, Home Depot stock yields 2.2%.

Of course, there are risks associated with this business, as it is highly sensitive to changes in interest rates and the health of the overall real estate market. But Home Depot has a proven track record of successfully weathering economic cycles. This stability will serve shareholders well in the years ahead.

2. Microsoft

Microsoft （Nasdaq Resonancestock (market)(Code: MSFT)The dividend yield on equities is relatively low, at less than 1%, but this is still higher than the dividend payout ratio forAppleThe dividend payout ratio of the stock. Even though the dividend payout is relatively low, the tech giant still pays out a lot of cash to shareholders every year. In the past six months, investors have received $11 billion in dividends from Microsoft, up from $10 billion a year ago.

You'd be hard pressed to find a company in better financial shape to pay such high levels of cash. Microsoft's software-as-a-service sales approach complements its world-leading market share, which is extremely lucrative. Last quarter's earnings jumped 23% to $27 billion.

Investors are excited about the potential of artificial intelligence (AI) to usher in a new era of growth for many of Microsoft's niches, particularly its Azure platform. But the business is also involved in several other big growth areas, including cybersecurity and mobile gaming. Such diversity will insulate investors from volatility when investing in smaller tech companies.

3. McCormick resonance

McCormick resonance test (McCormick(math.) genus(New York Stock Exchange: MKC)It's an excellent dividend stock that's going through a tough time. Since early 2023, the spice and flavor producer's shares have trailed sharply by more than $4.5 billion as growth has slowed following a pandemic spike.Standard & Poor's 500Index. After adjusting for currency fluctuations, revenues grew only 2% in the most recent quarter.

However, a rebound is likely on the horizon as management expects sales to grow steadily in fiscal 2024. Like its peers in the consumer staples industry, McCormick Resonance will be under pressure from slowing demand and the end of steep, inflation-linked price increases.

But this company has raised its dividend for 38 consecutive years, with a compound annual growth rate of 11%. Getting an impressive dividend at a discounted price on your portfolio is a great way to boost your long-term returns.

Should you invest $1,000 in Home Depot now?

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Demitri Kalogeropoulos owns shares of Apple Inc. and Home Depot Inc. The Motley Fool has positions in Apple, Home Depot, and Microsoft. The Motley Fool recommends Lowe's Companies and McCormick, and the following options: Microsoft January 2026 $395 Call Option Long and Microsoft January 2026 $405 Call Option Short. The Motley Fool recommends Lowe's Companies and McCormick, as well as the following options: Microsoft January 2026 $395 Call Option Long and Microsoft January 2026 $405 Call Option Short. The Motley Fool has a disclosure policy.

Top 3 Dividend Stocks to Buy for $500 Today was originally published by The Motley Fool.