The Smartest Dividend Stocks to Buy With $1,000 Right Now

Dividend stocks provide many benefits for investors. The dividends are generally paid by well-established, solid companies that investors don't have to worry about, and they offer an attractive passive income stream.

One benefit that's obvious in times like this is that they're stable under volatile market conditions. They typically continue to pay, and even raise, their dividends despite whatever is happening in the stock market, providing security for investors.

If you have $1,000 to spend on stocks today, you might be tempted to grab some amazing growth stocks on the dip. That could be a great idea, but don't forget about top dividend stocks that can offer your portfolio protection when times are tough. Prudential Financial (NYSE: PRU), Ally Financial (NYSE: ALLY), and American Express (NYSE: AXP) are three great candidates.

1. Prudential: A pure dividend play

Prudential is a large insurance and wealth management firm, and it's the traditional old financial, dividend-paying giant. It was established in 1875, and it's a company you feel sure will be around for a long time. It has global operations and $1.5 trillion in assets under management. Even though this is not a growth stock, it's investing in becoming a higher-growth, more efficient company, staying relevant and important in a changing world.

Investments for its high-income clientele are Prudential's bread and butter, and although the market is fluctuating these days, it's a boon for asset management companies. These kinds of companies are trained in leveraging changing prices to benefit their customers, and it typically shows up in higher earnings on their financial statements.

Don't expect high price returns from Prudential stock. Buying this stock is all about the dividend. At today's price, the dividend yields a juicy 5.3%, nicely above its five-year average of 5%. Locking in that yield today can provide literal dividends today, even as the market slides, and a stable, secure passive income stream for years.

2. Ally: The largest all-digital bank in the U.S.

Ally is an all-digital bank with roots in auto lending, and it was spun off to be a stand-alone bank 10 years ago, the right time to get started and establish itself as the leader in U.S. digital banking. It has 3.3 million customers and $146 billion in deposits as of the end of the 2025 first quarter.

Auto lending is also a major part of its business, and it's the top prime auto lender in the U.S. It had a record 3.8 million auto loan applications in Q1 with $10.2 billion in originations, and 44% of approvals were in the highest credit tier. With a rising default rate, management has implemented stricter loan protocols. The delinquency rate dropped significantly in Q1 2025, from 3.88% last year and 4.39% in the 2024 fourth quarter to 3.79% this year. Ally is likely to continue feeling some pressure as the economy is in flux, but the market celebrated its earnings beat in Q1. It reported $0.58 in adjusted earnings per share (EPS), while Wall Street was expecting $0.42.

Even though the stock jumped after the report last week, Ally stock is still down 12% this year, and it yields a very attractive 3.8% at the current price. Ally is a Buffett stock, and it offers growth opportunities combined with stability and a top dividend.

3. American Express: The Buffett favorite

American Express is also a Buffett stock, and Buffett has praised it many, many times, often citing it as an example when he explains what he looks for in a top business. It has a resilient model that targets an affluent population and charges fees for most of its cards. Its services are necessary in any kind of environment, and its closed-loop business does well under varied economic conditions.

It's been holding up well despite the current macroeconomy, growing through inflation and high interest rates. Its high earners are also high spenders, and revenue adjusted for currency changes and a leap year increased 9% year over year in the 2025 first quarter. The fee model is a built-in earnings mechanism, and card fees increased 20% year over year in the quarter, accounting for more than 13% of total revenue. EPS rose from $3.33 last year to $3.64 this year.

American Express' dividend doesn't have a very high yield, at 1.2% right now. But it's growing and reliable, and American Express offers growth opportunities that many high-yielding dividend stocks don't. It's a strong contender for a dividend stock that you can count on for years of growth, security, and stability.

Should you invest $1,000 in Prudential Financial right now?

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American Express is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.