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When constructing a protracted‑time period portfolio of dividend shares, it’s not simply concerning the highest yields. What actually issues is constant progress backed by stable income, smart payout ratios, and a manageable stability sheet.
If payouts rise 30%-70% over a couple of years and are properly coated by earnings, that’s extra significant than a stretched 10% yield that dangers a minimize.
With that in thoughts, I’ve recognized three FTSE shares forecast to develop dividends by 40% or extra by 2028: Bellway (LSE: BWY), Lloyds and Rolls‑Royce.
The query is: how correct are these forecasts?
Kicking the tyres
Beginning with Lloyds, the dividend per share (DPS) was 3.64p in 2025. Forecasts level to 4.18p this 12 months, 4.6p in 2027 and 5.06p in 2028. That’s round a 40% complete enhance over three years.
That regular progress mixed with a beginning yield comfortably forward of money financial savings can actually add up for affected person buyers.
Bellway and Rolls‑Royce are even punchier. Bellway’s peculiar DPS is at the moment 70p per share, forecast to edge as much as about 70.6p this 12 months, then soar to 90.1p in 2027 and 100.9p in 2028. That’s a complete enhance of roughly 57% between 2025 and 2028.
Rolls‑Royce begins from a a lot smaller payout, with a complete dividend of solely 9.5p per share for 2025 after its latest restart. However brokers count on 12.6p in 2026, 14p in 2027 and round 16.7p in 2028, which is about 76% progress over the identical interval.
These final two names are clearly extra cyclical and depend on continued earnings momentum, however the dividend progress profile is tough to disregard.
Taking a better have a look at Bellway
Bellway is the outlier right here. Though it sits alongside two very properly‑identified FTSE 100 giants, it’s a FTSE 250 mid‑cap with a superb observe file. The housebuilder has paid dividends for 41 years with out interruption, which is spectacular given the variety of housing slumps and rate of interest cycles it has lived by.
The dividend coverage targets cowl of round 2.5 occasions earnings, with the present payout ratio at about 52.7%. That’s a cushty center floor — beneficiant, however not reckless.
The stability sheet reveals very low debt of about £48.7m and money of roughly £146m. Spectacular numbers, even after launching a £150m share buyback.
Importantly, money protection of two.64 occasions offers it further respiration area if the housing market slows (or construct prices rise). Mainly, there’s sufficient money to fund operations and nonetheless pay shareholders with out having to lean closely on borrowing.
That doesn’t imply it’s threat‑free. As a housebuilder, it’s uncovered to the home housing cycle. Weaker costs, increased mortgage charges or tighter lending might all harm income or pause dividend hikes.
The underside line
For UK buyers, Bellway’s an attention-grabbing instance of what high quality dividend progress ought to seem like. It’s bought a 4‑decade observe file, a wise payout ratio, and robust money protection. Which means a forecast of greater than 50% in three years isn’t unrealistic.
However whether or not it’s best for you will depend on how snug you might be with the ups and downs of the housing market. For buyers prepared to trip out volatility for the prospect of sturdy revenue progress, it’s a share that deserves a better look — along with extra acquainted names together with Lloyds and Rolls‑Royce.
