Dividend Snowball: Building a 8%-Yielding Portfolio

The article discusses the search for a "near-perfect dividend snowball," a strategy to generate an ever-growing stream of passive income from dividends. The author, a finance expert with experience at Bloomberg, aims to build a portfolio that yields 8% and grows faster and faster over time.

In the quest for passive income, dividend investors are constantly seeking the elusive "near-perfect dividend snowball." This strategy aims to generate an ever-growing stream of passive income from dividends, ideally yielding 8% and growing faster over time. As of July 2, 2025, several stocks stand out as potential candidates for such a portfolio.

Fortis (TSX: FTS) offers a compelling case. Trading near $64.50, Fortis is a top dividend-growth stock that has raised its dividend for 51 consecutive years. The company's $26 billion capital program is expected to boost the rate base from $39 billion in 2024 to $53 billion in 2029, driving earnings growth and supporting annual dividend increases of 4% to 6% over the coming five years. At the time of writing, the stock offers a 3.8% dividend yield, which, while lower than some alternatives, is balanced by the company's consistent dividend growth [1].

Enbridge (TSX: ENB) is another strong contender. With a focus on pipeline infrastructure, Enbridge has diversified its assets through acquisitions in wind and solar development, oil export terminals, and natural gas distribution utilities. The company's $28 billion capital program will drive earnings growth and support ongoing dividend increases. Enbridge has raised its dividend for 30 consecutive years and currently offers a 6.1% dividend yield [1].

For those seeking higher yields, Realty Income (O) and Kinder Morgan (KMI) are notable. Realty Income is known for its monthly dividend payments, with a yield of just under 5% as of 2025, and Kinder Morgan offers a yield of around 7.5% [2]. These companies generate stable cash flows from their assets, making them attractive for income-focused investors.

Johnson & Johnson (JNJ) is a dividend aristocrat, having increased its dividend for more than 60 years straight. The company's current yield is around 3%, but its steady dividend growth and solid financial health make it a reliable choice for long-term investors [2].

Procter & Gamble (PG), Colgate-Palmolive (CL), and PepsiCo (PEP) are also dividend aristocrats, known for their consistent dividend increases and strong financial performance. These companies operate in sectors that tend to perform well regardless of market conditions, making them attractive for those seeking stable income [2].

To build a portfolio that yields 8% and grows faster over time, investors should focus on companies with low payout ratios, healthy profit margins, and room for long-term growth. It's also important to consider tax efficiency and the potential for dividend growth. Regularly reviewing and rebalancing the portfolio can help maintain the desired yield and growth rate.

References:
[1] https://ca.finance.yahoo.com/news/tfsa-income-2-canadian-stocks-014500383.html
[2] https://accountantsworcestershire.co.uk/best-dividend-stocks-for-high-passive-income-in