Snowball Portfolio is the 5+5 rule, which I learned from Daniel Peris' excellent book - Strategic Dividend Investor (side note- Peris can write and is a man who really loves his dividends). Like most useful rules, its very simple - look for a combination of 5 percentage points of current dividend yield plus 5 percentage points of dividend growth. The total should be at least ten percentage points, so a company with a 3% dividend yield would need at least 7% dividend growth to clear the bar. Likewise a high yielding company with say 8% would only need a tepid 2% growth to get over the 5+5 hurdle.
The rule is not about mathematical precision as much as its about orienting your frame of reference for investment selection and ongoing portfolio management - what am i looking for with this investment? What does "good enough" look like?
Its not the only metric, and probably not even the most important one, but its handy test that you can run every year to do a checkup based on your goals. Having hurdle rates for each company sets the expectations on what you're looking for for each kind of company. Is it a lower yielding but higher growing company or a high yield, steady as she goes? The Snowball Portfolio has both kinds. Here is the current check up for how many companies have cleared the 5+5 hurdle for 2013.
The other piece of the analysis is identifying those companies not clearing the bar. When will we see a meaningful dividend increase from Intel, Kraft, People's United, and Douglas Dynamics? Its not something to panic about in any of these cases, in my view, but its good to be aware. So from an ongoing monitoring standpoint the simple 5+5 Rule helps you focus on companies and could signal places where they might stall out.
Its just one way to combine data points, but its a tool I have found it useful both on the selection part f the process as well as on the ongoing monitoring and management part of the process.