There's no denying that dividend stocks are some of the best investments you can buy due to the passive income they generate and the significant growth potential they offer.

However, often, investors buy dividend stocks for the wrong reasons, such as an ultra-high dividend yield or perceived resiliency.

The smartest dividend stocks to buy, though, are the highest-quality companies on the market. Plus, it's even better when you can buy these stocks undervalued.

Buying the highest-quality companies is essential because you can have confidence in owning them for the long haul, taking full advantage of all the passive income they generate and the value they create for shareholders.

So, if you've got hard-earned money on the sidelines that you're looking to put to work, here are three of the smartest dividend stocks to buy now.

One of the best dividend stocks to buy now

The telecommunications industry is typically an excellent place to find high-quality dividend stocks, and right now, with Telus (TSX:T) trading near the bottom of its 52-week range, there's no question it's one of the smartest stocks to buy.

Telecom stocks like Telus consistently generate significant revenue, provide an essential service ensuring much of that revenue is sticky, and generate significant cash flow due to their long-life assets. This makes Telus one of the best dividend stocks you can buy.

Furthermore, with the stock trading well off its highs and with its dividend yield now having increased to more than 7.6%, it's certainly worth considering today. For reference, its average yield over the last five years is just 5.4%.

Plus, not only does it offer a sustainable dividend with an impressive yield, but Telus also increases its dividend annually and, going forward, is aiming to grow the dividend by 7% each year.

Therefore, while this impressive and reliable dividend growth stock trades cheaply and offers such a compelling yield, it's undoubtedly one of the smartest dividend stocks you can buy now.

One of the best royalty stocks in Canada

In addition to Telus, another smart dividend stock to buy now while it trades off its highs is Pizza Pizza Royalty (TSX:PZA).

Pizza Pizza is an ideal dividend stock because it constantly receives royalty payments from all the Pizza Pizza and Pizza 73 franchise locations across the country.

Furthermore, the stock only has minimal expenses to keep the fund running. That means that the majority of its revenue flows through to the bottom line and then is paid back to investors through the dividend.

Therefore, because Pizza Pizza simply receives a royalty on aggregate sales done across the country, its revenue doesn't fluctuate much from quarter to quarter or year over year.

In addition, it's built its brand as a low-cost, convenient option for consumers, which also helps to keep sales robust during periods of uncertainty in the economy, as we've experienced recently.

Therefore, while you can buy Pizza Pizza near the bottom of its 52-week range and lock in a yield of more than 7%, there's no doubt it's one of the smartest dividend stocks to buy now.

A top long-term growth stock offering an attractive dividend yield

Finally, another undervalued stock to buy now and hold for the long haul is Canadian Tire (TSX:CTC.A), the well-known Canadian retailer.

Canadian Tire is one of the smartest dividend stocks to buy now because it offers significant long-term growth potential, pays an attractive yield and still trades at an attractive valuation.

Not only has Canadian Tire consistently grown its operations for years before running into significant headwinds in recent quarters, but it continues to have growth potential both in the short and long term, in part due to its massive loyalty program and impressive e-commerce platform.

Plus, with Canadian Tire recovering now, expected to see a jump in earnings per share this year of 21.8%, it trades at a forward price-to-earnings ratio of just 11.4 times, the cheapest it's been since May.

Furthermore, its yield has now climbed to 4.6% as Canadian Tire stock sold off, significantly higher than its average yield over the last five years of 3.8%.

Therefore, while you can buy Canadian Tire stock cheaply and lock in an attractive yield, it's certainly one of the smartest dividend stocks to buy now.