Build a Lucrative Passive-Income Portfolio With Just $35,000

Building a passive-income portfolio takes patience and the right stocks. Here’s a trio of options to get started with today.

Key Points
  • Build a diversified $35,000 passive-income portfolio using TD Bank, Dream Industrial REIT, and Fortis for both stability and growth.
  • TD adds big-bank resilience and U.S.-driven growth, Dream provides monthly REIT income, and Fortis delivers regulated-utility reliability with 52 straight years of dividend hikes.
  • At recent yields (~3.5%–5.7%), allocating roughly $12,000 to each can generate about $1,515 a year in dividends (monthly from Dream; quarterly from TD and Fortis).

One of the goals of every investor is to build out a well-diversified passive income portfolio that can provide both growth and income over the long term.

While there’s no shortage of stocks to accomplish that feat, some investments are better than others.

Here’s a trio of options to build out that passive-income portfolio with just $35,000.

diversification is an important part of building a stable portfolio

Source: Getty Images

Big Bank stability

The first stock for investors looking to establish a passive-income portfolio is Toronto-Dominion Bank (TSX: TD). TD is the second-largest of the big bank stocks.

TD offers investors a unique mix of big bank stability and dividend growth that makes it a perfect fit for any passive income portfolio.

TD’s appeal is dual-fold. The bank offers a juicy dividend (more on that in a bit) while also offering stellar growth prospects.

TD’s growth policy is focused on the U.S. market. In the years following the Great Recession, the bank established a sizable branch network that stretches from Maine to Florida. Today, that segment generates an increasing share of the bank’s revenue, adding to its defensive appeal.

Finally, we get to TD’s dividend, which is one of the main reasons why investors flock to this passive-income portfolio candidate. The bank pays a respectable 3.6% yield and boasts over a decade of annual bumps.

For those investors looking for that perfect passive income mix, investing $12,000 into this big bank stock will provide just over $550 annually. That amount will grow further if investors choose to reinvest those dividends until needed.

Monthly landlord-like income

REITs represent another great option for investors seeking to build out a passive-income portfolio. Specifically, I’m referring to Dream Industrial REIT (TSX: DIR.UN) as an option for any diversified portfolio.

Dream Industrial owns 552 industrial buildings spread across Canada, Europe, and the U.S. Those buildings include both warehouses and logistic facilities that are focused around major metro markets.

The company is actively expanding its presence in markets such as Europe, where rents are on the upswing. Beyond its expansion, Dream has an impressive pipeline of development properties that will continue to add to the REIT’s bottom line.

Collectively, the existing portfolio of sites provides a whopping 73.2 million square feet of leasable area to Dream’s 1,465 tenants. Those tenants are well-diversified, and Dream boasts an occupancy north of 95%.

The result is a well-diversified business that generates a stable, recurring and growing revenue stream. And that revenue stream allows Dream to invest in growth and pay out a monthly distribution.

As of the time of writing, Dream’s yield comes in at 5.7%, making it a top-paying option when considering additions to any passive-income portfolio. A $12,000 investment in Dream will generate an income of nearly $700.

Reliability and income wrapped into one stock

Fortis (TSX: FTS) is the third stock for investors seeking to add to a passive-income portfolio to consider. The company is one of the largest utility stocks on the market, generating a stable and recurring revenue stream that is backed by long-term regulated contracts.

That revenue stream allows Fortis to focus on investing in growth initiatives and paying out a very attractive quarterly dividend. As of the time of writing, Fortis offers a 3.5% yield, which makes it a no-worry, no-fuss option for any passive-income portfolio.

Adding to that appeal is the fact that Fortis boasts an incredible 52 years of consecutive annual increases to that dividend. That’s a feat that is only bettered by a single stock in Canada, and puts Fortis into a unique league of Dividend Kings.

Turning to growth, Fortis isn’t resting on its laurels. The company has a massive $28 billion capital plan that is funding growth through the next several years.

Build your passive income portfolio

No stock is without risk. Fortunately, Fortis, Dream and TD offer investors a mix of growth and defensive appeal in addition to their attractive yields.  

And here’s how that passive income portfolio works out, given a $12,000 investment in each.

CompanyRecent PriceInvestmentNo. Of SharesDividendTotal Annual PayoutFrequency
TD Bank$114.02$12,000105$4.20$441Quarterly
Dream Industrial REIT$12.12$12,000990$0.70$693Monthly
Fortis$73.40$11,000149$2.56$381.44Quarterly
Total    $1515.44 

Fool contributor Demetris Afxentiou has positions in Fortis and Toronto-Dominion Bank. The Motley Fool recommends Dream Industrial Real Estate Investment Trust and Fortis. The Motley Fool has a disclosure policy.

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