The Smartest Dividend Stocks to Buy With $3,000 Right Now

Need dividends? The highest-yielding stocks aren’t necessarily your best choice. Quality counts. A company should not only be able to continue funding its payouts, but should also be capable of growing its dividend payments in the future.

If you’ve got a few thousand bucks you’re ready to commit to some new income-producing investments, here’s a look at three of the market’s smartest dividend stocks to buy right now.

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There’s no denying the pharmaceutical industry’s glory days are in the past. This market’s simply become very crowded, by a bunch of similar drugs as well as by a bunch of companies making them. Merck (NYSE: MRK) is no exception.

What Merck may lack in raw growth firepower, however, it makes up for with savvy portfolio management.

Take its best-selling drug Keytruda as an example. It’s on pace to generate on the order of $30 billion worth of revenue this year, up from nothing in 2013 when the oncology drug won its first approval (before going on to secure a few dozen more). But Merck didn’t actually develop it. It was acquired by virtue of 2009’s acquisition of biopharma outfit Organon, which figured out Keytruda’s winning formula back in 2006, years before any approval and subsequent revenue. Before that, Merck’s breadwinner was arthritis treatment Remicade. Prior to that it was blockbuster asthma treatment Singulair, which was part of Schering-Plough’s portfolio when Merck bought it in 2009. Before Singulair, Merck’s flagship product was diabetes drug Januvia.

In this vein, even though Keytruda’s sales have never been stronger, the drugmaker’s already made a point of securing the developmental rights — at a bargain price, no less — to a cancer immunotherapy being developed by China’s LaNova Medicines that’s merely showing promise as a superior option to Keytruda.

The point is, Merck recognizes and preemptively responds to the inevitable end of its top-selling drugs’ dominance by finding its next top seller before it’s an obvious winner.

Merck’s track record of updating its drug portfolio early and often with the right pharmaceuticals is a big reason the company’s now been able to raise its dividend for 14 consecutive years. And by more than a little. Its quarterly per-share payout of $0.44 a decade ago now stands $0.77. That’s an annualized growth rate of nearly 6%, handily outpacing inflation for the same time frame. Merck stock itself has also advanced more than 70% during this stretch, and that’s with a recent, sizable sell-off.

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