3 Buy-And-Forget Dividend Stocks With Snowballing Payouts

"If the headline yield today is not something you're concerned with, and you pay more attention to how fast a yield can grow, then it's worth buying dividend stocks you can forget about for decades. By the time you cash out, stocks like , and may snowball fast enough to beat the broader market significantly. As with any strategy, there are pros and cons to keep in mind. The most significant disadvantage is that things become highly unpredictable when you stretch out your time horizon decades into the future."

"The advantage of investing in dividend stocks with snowballing payouts is that it can keep you ahead of the broader market over the long term. For example, a stock that yields 2% and grows its dividends by 10% annually could compound to a 35% yield on cost at year 30. The following three dividend growth stocks can make that happen. Taiwan Semiconductor Manufacturing Company (TSM) Taiwan Semiconductor Manufacturing Company, or TSMC, has been a major beneficiary of the semiconductor boom. Most semiconductor companies, such as are actually fabless companies, meaning the manufacturing is done by TSMC."

"Many investors overlook just how much pricing power and importance this one company holds over the entire tech industry today. This is why TSM stock is perhaps the best way to play the AI game long-term. It doesn't matter if Nvidia, , or some other company dominates the future AI chip industry. Rest assured, TSMC is likely to be the one manufacturing these chips."

Buying dividend-growth blue-chip stocks and holding them for decades allows dividend payouts to compound and potentially outpace broader market returns. Long time horizons create unpredictability, so capital should be allocated to high-quality, blue-chip dividend growers only. A modest starting yield that grows rapidly can snowball: a 2% yield growing dividends 10% annually can reach about a 35% yield on cost after 30 years. Taiwan Semiconductor Manufacturing Company (TSMC) exemplifies this approach because many chipmakers outsource fabrication, giving TSMC pricing power and centrality to AI chip production. TSMC is expanding fabs in Arizona and shows a 1.09% trailing yield with 11.28% five-year dividend growth.

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