The thought of building a passive-income portfolio can be daunting to some investors. In reality, it’s not scary, nor is it hard to setup a great portfolio that can provide growth and income over time.
Let’s take a look at how we can construct a passive-income portfolio with $50,000.
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Start with the defensive King
Just like any sports team, the back line is super important. The right defensive investments can provide a reliable source of income and growth that are largely immune to market volatility.
That’s why a great pick to start this passive-income portfolio is Fortis (TSX: FTS). Fortis is one of the largest utility stocks in North America.
Utilities generate a reliable revenue stream that is backed by long-term, regulated contracts. Those contracts, which span decades in duration, provide stability for the company to invest in growth and pay out a handsome dividend.
In the case of Fortis, that dividend works out to a 4.05% yield. Prospective investors should also note that Fortis is one of just two Dividend Kings on the market. This means that Fortis has provided annual upticks to its dividend for 50 consecutive years.
The company also plans to continue that cadence, making it a top pick for any passive-income portfolio.
Bank on success
Canada’s big banks are always great picks for any long-term portfolio. Not only do they offer reliable revenue, but they also have strong growth prospects and pay out a juicy dividend.
Bank of Montreal (TSX: BMO) is a superb option for investors looking to build out or enhance any passive-income portfolio.
BMO is the oldest of the big banks and has been paying dividends out for nearly two centuries without fail. This fact alone makes the bank an incredibly stable pick for long-term investors.
Turning to growth, BMO has expanded heavily into the U.S. market in recent years, expanding to 32 state markets. That growth provides BMO with the financial muscle to continue growing and paying out a tasty quarterly dividend.
As of the time of writing, that dividend boasts a tasty 4.62% yield. And like Fortis, BMO has an established cadence of providing annual increases to that dividend.
Now throw a telecom into the mix
One final pick to consider comes from another defensive segment, Canada’s big telecoms, specifically Telus (TSX: T).
Telus and its big telecom peers have been under pressure in recent years as inflation and interest rates drove stock prices lower and debt higher.
As a result, the stock trades down 18% over the trailing 12-month period.
That being said, Telus doesn’t have the same struggles that its peers do, which have sizable media segments. In other words, the current discounted stock price presents itself as an opportunity for long-term investors to purchase an otherwise superb investment.
Investors should note that while that stock price remains low, Telus’s dividend has swelled. As of the time of writing, the yield on the stock sits at an insane 7.94%.
Telus has also provided annual or better increases to that dividend going back over a decade without fail.
Build your passive-income portfolio
Here’s how the stocks mentioned above measure out with that initial $50,000 investment.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Fortis | $60.81 | 17000 279 | $2.46 | $686.34 | Quarterly |
| Bank of Montreal | $144.86 | 25000 172 | $6.20 | $1066.40 | Quarterly |
| Telus | $20.27 | 8000 394 | $1.61 | $634.34 | Quarterly |
Investing $50,000 across the three stocks mentioned above can provide investors with just shy of $2,400 each year.
Keep in mind that prospective investors who aren’t ready to draw on that income yet can invest those dividends, allowing your portfolio (and eventual income) to continue growing.
