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When you’re building a long-term portfolio of dividend stocks, it’s not just about high yield. Most important is consistent growth supported by strong profitability, reasonable payout ratios, and a manageable balance sheet.
If payments increase by 30%-70% over a few years and are well covered by benefits, that means there is a 10% extended reward risk reduction.
With that in mind, I identified three FTSE Stocks forecast to grow dividends by 40% or more by 2028: Bellway (LSE: BWY), Lloyds again Rolls-Royce.
The question is: how accurate are these predictions?
Kicking the tires
From Lloyds, the dividend per share (DPS) was 3.64p in 2025. Forecasts point to 4.18p this year, 4.6p in 2027 and 5.06p in 2028. That’s about a 40% increase over three years.
That continued growth combined with a comfortable initial yield before cash savings can really attract patient investors.
Bellway and Rolls-Royce are even punchier. Bellway’s average DPS is currently 70p per share, forecast to reach around 70.6p this year, then jump to 90.1p in 2027 and 100.9p in 2028. That’s a total increase of nearly 57% between 2025 and 2028.
Rolls-Royce is starting on a much smaller payout, with total earnings of just 9.5p per share in 2025 after its latest relaunch. But retailers are expecting 12.6p in 2026, 14p in 2027 and around 16.7p in 2028, representing 76% growth over the same period.
Those last two terms are obviously more cyclical and dependent on continued earnings momentum, but the earnings growth profile is hard to ignore.
A closer look at the Bellway
Bellway is the outlier here. Although it sits next to the two most famous FTSE 100 giants, i FTSE 250 a mid-cap with an excellent track record. The homebuilder has paid dividends for 41 years without interruption, which is impressive given the number of housing collapses and interest rate cycles it has lived through.
The target profit policy covers 2.5 times returns, the current payout ratio is around 52.7%. That’s a middle ground – generous, but not reckless.
The balance sheet shows a very low debt of £48.7m and cash of around £146m. Impressive numbers, even after introducing a £150m dividend return.
Importantly, the 2.64 times cash coverage gives it more breathing room if the housing market slows (or construction costs rise). In fact, there is enough cash to fund operations and still pay shareholders without relying heavily on borrowing.
That doesn’t mean it’s harmless. As a real estate developer, the cycle of domestic houses is presented. Weak prices, higher mortgage rates or tighter lending can hurt profits or stall dividend growth.
An important point
For UK investors, Bellway is an interesting example of what dividend growth should look like. It has a fourteen-year track record, a reasonable payout ratio, and strong liquidity. That means a forecast of more than 50% in three years is not impossible.
But whether it’s worth it depends on how comfortable you are with the ups and downs of the housing market. For investors willing to offset the volatility of the opportunity for strong income growth, the share deserves a closer look – more than the usual names including Lloyds and Rolls-Royce.
