3 Buy-And-Forget Dividend Stocks With Snowballing Payouts

TSMC (TSM) manufactures chips for Nvidia and AMD and holds major pricing power over the tech industry.

Fastenal (FAST) stock dropped 19% from its $50 peak but still offers a 2.15% yield with 11.84% annual dividend growth.

Novo Nordisk (NVO) cut its 2025 sales growth guidance four times and now expects 8% to 11% growth.

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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 TSMC (NYSE:TSM), Fastenal (NASDAQ:FAST) and Novo Nordisk (NYSE:NVO) 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. To account for this disadvantage, you should only put your money into blue-chip dividend growth stocks.

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, or TSMC, has been a major beneficiary of the semiconductor boom. Most semiconductor companies, such as Nvidia (NASDAQ:NVDA) 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, Advanced Micro Devices (NASDAQ:AMD), or some other company dominates the future AI chip industry. Rest assured, TSMC is likely to be the one manufacturing these chips.

The company is in the process of building plants in Arizona to ensure that it can survive any Taiwan-specific shocks while lessening any future tariff impacts. TSM is already exempt from paying chip tariffs.

Hence, I see it as a safe long-term stock to hold if you want snowballing dividends. TSM comes with a trailing dividend yield of 1.09%, but the five-year dividend growth rate is at 11.28% annually. The payout ratio is also very low at 4.88%. If TSM were to distribute 20% of its earnings as dividends, the dividend yield would approach 4.5%. EPS is expected to grow from $10.35 in 2025 to $15.6 in 2027. So, even a constant payout ratio of 5% can lead to solid dividend growth here.

Fastenal is an industrial supply company that specializes in fasteners, tools, and related products. FAST stock has been one of the most reliable and dependable long-term names, and the growth trajectory has been highly predictable.

That said, it is currently undergoing a cooldown, as the stock has retreated by 19% from its peak of $50. It is still up 15% year-to-date, and it remains in a strong long-term uptrend. Thus, I see no reason to be bearish here.

In fact, the discount gives you a great entry point. You get a 2.15% yield with a five-year dividend growth rate of 11.84% annually. EPS is expected to grow at ~10% annually for the foreseeable future, and the ongoing push to onshore and reindustrialize America could lead to more positive surprises down the line.

Novo Nordisk is in the toughest spot compared to the two other stocks in this list, but it also gives you the most opportunity. The weight loss market is huge, and the rising tide is likely to lift all boats in the long term, including Novo Nordisk. NVO stock is down nearly 58% over the past year due to slowing demand for Ozempic and Wegovy.

Novo Nordisk also cut its full-year 2025 growth guidance four times. It now expects sales growth of 8% to 11%. The company also abandoned its $10 billion bid for Metsera.

On the flip side, the stock looks very cheap at these levels. You’re paying less than 13x forward earnings now for a company with significant long-term potential. The market for weight-loss drugs remains huge, and it retains a larger market share in Europe, where it is based. This is a good buy-the-dip opportunity if you want to buy and hold for decades.

You get a juicy 3.78% dividend yield to sweeten the deal. The five-year dividend growth rate is 21.57% annually, and the payout ratio is at 52.39%.