3 Best Dividend Stocks to Buy With $1,000

It’s always a great time to set money aside for the future, and you don’t need a ton of money to have a meaningful impact down the road — especially if you invest wisely. Even a $1,000 investment could compound into more than $17,000 in 30 years if it just matches the stock market’s historic rate of return. So just imagine what it could do if your investments do even better.

With that in mind, here are three great stocks for growth and income, all of which I own in my portfolio, and all of which have the potential to beat the market over time.

1. Realty Income: The best overall dividend stock in the market?

I’ve called Realty Income (NYSE:O) the best overall dividend stock in the market, and I truly believe it’s worthy of such a title. Not only has the company produced an incredible 15.1% annualized return since its 1994 NYSE listing, it has also increased its dividend for 97 consecutive quarters and has made 617 consecutive monthly dividend payments (that’s more than 51 years).

If you aren’t familiar, Realty Income is a real estate investment trust, or REIT, that invests in single-tenant properties. The bulk of the more than 11,000 properties in its portfolio are retail in nature, but don’t let this scare you. Realty Income’s tenants are mostly engaged in businesses that are resistant to e-commerce disruption as well as recessions. Discount-oriented stores like dollar stores, service businesses like restaurants, and nondiscretionary retailers like convenience stores are just a few examples.

In a nutshell, Realty Income is set up to be a fantastic long-term compounding machine and has a long track record of delivering for its investors. In fact, a $1,000 investment in Realty Income at the time of its 1994 NYSE listing would be worth more than $50,000 today with dividends reinvested. This was the very first REIT I ever bought, and it remains a staple of my portfolio.

2. American Campus Communities: A resilient business with excellent tailwinds

American Campus Communities (NYSE:ACC) is also a REIT, this time with a focus on the student housing industry. Not only did this founder-led business pioneer the purpose-built student housing industry in the 1990s, but it also has an impressive track record of delivering market-beating returns for investors.

The company is currently the largest owner, developer, and manager of student housing in the United States, with 166 properties and nearly 112,000 rentable bedrooms. But it could be just scratching the surface. American Campus Communities currently has just 1.5% of the 7.1 million students at its target universities, and the bulk of students still live in traditional (and outdated) on-campus housing or off-campus apartment complexes.

What’s more, American Campus Communities is ramping up its on-campus development, where it builds and manages properties in partnership with universities, which creates a more asset-light revenue stream. With the least new supply of student housing coming onto the market in 2022 in more than a decade, paired with a surge in college applications, American Campus Communities could be set for some excellent years ahead of it.

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