While there is no shortage of stocks to achieve this feat, some investments are better than others.
Here are three options to build that passive income portfolio with just $35,000.
Stability of the big banks
The first stock for investors looking to build a passive income portfolio is Toronto Dominion Bank (TSX:TD). TD is the second largest of the major bank stocks.
TD offers investors a unique blend of big bank stability and dividend growth, making it a perfect fit for any passive income portfolio.
The appeal of TD is twofold. The bank offers a juicy dividend (more on that later) while offering great growth prospects.
TD’s growth policy is focused on the American market. In the years following the Great Recession, the bank established an extensive branch network stretching from Maine to Florida. Today, that segment generates an increasing share of the bank’s revenues, adding to its defensive appeal.
Finally, we come to TD’s dividend, one of the main reasons why investors are flocking to this passive income portfolio. The bank pays a respectable yield of 3.6% and boasts more than a decade of annual interest rate increases.
For investors looking for that perfect passive income mix, investing $12,000 in these big bank stocks will return just over $550 annually. That amount will continue to grow if investors choose to reinvest those dividends until they are needed.
Monthly landlord-like income
REITs are another great option for investors looking to build a passive income portfolio. Specifically I refer to Dream Industrial REIT (TSX:DIR.UN) as an option for any diversified portfolio.
Dream Industrial owns 552 industrial buildings across Canada, Europe and the US. These buildings include both warehouses and logistics facilities focusing on key metro markets.
The company is actively expanding its presence in markets such as Europe, where rental prices are rising. In addition to the expansion, Dream has an impressive pipeline of development properties that will continue to contribute to the REIT’s bottom line.
Collectively, the existing portfolio of locations offers no less than 73.2 million square meters of lettable area to Dream’s 1,465 tenants. These tenants are well diversified and Dream has an occupancy rate of more than 95%.
The result is a well-diversified business that generates a stable, recurring and growing revenue stream. And that income stream allows Dream to invest in growth and pay out a monthly benefit.
At the time of writing, Dream’s yield is 5.7%, making it a top-paying option when considering additions to a passive income portfolio. A $12,000 investment in Dream produces an income of almost $700.
Reliability and income packed into one share
Fortis (TSX:FTS) is the third stock investors can consider adding to a passive income portfolio. The company is one of the largest utilities in the market and generates a stable and recurring revenue stream supported by long-term regulated contracts.
This revenue stream allows Fortis to focus on investing in growth initiatives and paying a very attractive quarterly dividend. At the time of writing, Fortis offers a 3.5% yield, making it a worry-free option for any passive income portfolio.
Adding to this appeal is the fact that Fortis boasts an incredible 52 years of consecutive annual increases in that dividend. That’s a performance that can only be surpassed by a single stock in Canada, and puts Fortis in a unique class of Dividend Kings.
When it comes to growth, Fortis is not resting on its laurels. The company has a massive $28 billion capital plan that will fund growth in the coming years.
Build your passive income portfolio
No share is without risk. Fortunately, In addition to their attractive returns, Fortis, Dream and TD also offer investors a mix of growth and defensive appeal.
And here’s how that passive income portfolio turns out, given an investment of $12,000 in each.
| Company | Recent price | Investment | Number of shares | Dividend | Total annual payout | Frequency |
| TD bank | $114.02 | $12,000 | 105 | $4.20 | $441 | Quarterly |
| Dream Industrial REIT | $12.12 | $12,000 | 990 | $0.70 | $693 | Monthly |
| Fortis | $73.40 | $11,000 | 149 | $2.56 | $381.44 | Quarterly |
| Total | $1515.44 |
#Build #lucrative #passive #income #portfolio