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Hi,
Dividend growth and dividend safety often fall under separate categories.
- Dividend safety looks at how unlikely a dividend reduction is.
- Dividend growth looks at how quickly the dividend is expected to grow.
The same question underlies both, however. That question is:
“What is going to happen to the dividend going forward?”
Dividend safety looks at the downside of the above question. Dividend safety doesn’t care about the upside of dividend growth.
Dividend growth looks at the upside. It is focused on the speed at which the dividend will grow. While dividend growth can be negative, in practice investors tend to use it to project positive growth estimates.
Dividend safety and dividend growth are linked.
Interestingly, a fast-growing dividend is a safe dividend, with a caveat.
Dividend growth is a signal from a company’s management. A quickly increasing dividend means that management expects earnings-per-share to continue increasing, and is therefore comfortable paying out higher dividends as a result of underlying business growth.
Profitable business expansion is by definition better than a business on the decline. And obviously a growing businesses’ dividend is safer than a stagnant businesses’ dividend.
The caveat to the above is the payout ratio. Rapid dividend growth accompanied by a much higher payout ratio is not the same as rapid dividend growth due to earnings growth.
Dividend growth from boosting the payout ratio signals that management doesn’t have adequate growth prospects to reinvest capital, and will therefore boost the dividend to return money to shareholders.
This is responsible capital allocation policy; it’s far better than chasing weak growth prospects. But it doesn’t result in longer-term dividend growth.
And, a higher payout ratio without accompanied earnings-per-share growth makes the dividend riskier overall. This is because there’s less earnings coverage for the dividend.
Our Dividend Risk Score factors in:
- Expected dividend growth
- Payout ratio
- Dividend history
This combination of metrics reflects the reality that growth, payout ratio, and corporate culture and longevity (shown by dividend history) matter to overall dividend safety.
The Top 10 in the June 2026 edition of the Sure Dividend Core Newsletter have the following:
- Dividend Risk Scores of “A” or “B” – Our two safest categories.
- The average payout ratio for is just 40%
Note: Our payout ratios use expected earnings for the current fiscal year.
- The average dividend growth rate is a high 8.3%
- The average streak of consecutive dividend increases is 24.
Our Systematic Ranking Approach
The Sure Dividend Core Newsletter Top 10 is not a quick rundown from some self-proclaimed 'stock market guru'.
Instead, our ~15 person team analyzes more than 900 income securities every quarter in the Sure Analysis Research Database, over the same metrics that matter.
“The person that turns over the most rocks wins the game. And that’s always been my investing philosophy.”
– Peter Lynch
Notes: Here's an example of 1 of our 900+ quarterly reports we do in Sure Analysis, to get an idea of the level of research that goes into finding the Sure Dividend Core Newsletter Top 10. And here's our glossary for explanations of metrics.
The metrics and research we do in the Sure Analysis Research Database power our flagship newsletter, the Sure Dividend Core Newsletter.
The exact ranking methodology we use is shown below (it's in each edition of the newsletter as well):
"You are doing A GREAT JOB. I am 77 yrs of age. Method of investing has worked perfectly for past 40 years. I retired in 1984. Kindest regards. You are one of a very few on the right track. Keep on with your excellent research and newsletter."
– Sure Dividend member
About The Sure Dividend Core Newsletter
The Sure Dividend Core Newsletter analyzes our Top 10 high quality dividend growth stocks every month.
The Sure Dividend Core Newsletter:
- Always publishes on the 1st Sunday of the month
- Initial edition went live in April of 2014
- Is currently trusted by more than 5,000 investors
And the SDC Newsletter has everything you need to build your rising passive income portfolio, including:
- Our Top 10 dividend growth stock buys
- Actionable sell recommendations
(As needed)
- A portfolio building guide
- And much more
We find the Top 10 best dividend growth stocks for the SDC Newsletter by analyzing more than 900 income securities every quarter in the Sure Analysis Research Database.
- Securities are analyzed over the same metrics so we can compare them on an apples-to-apples basis.
- This is real analysis from our ~15-person analyst team. It's not a quick computer screen or AI guesswork.
- All this analysis feeds into the SDC Newsletter Top 10 so we can systematically identify the best dividend growth stocks for our members.
Note: Click here to see a historical edition.
Why Now Is The Best Time To Get The SDC Newsletter
Now is the best time to get the SDC Newsletter because...
- New June 2026 Newsletter
We will publish the new June 2026 edition of our flagship Sure Dividend Core Newsletter (SDC) this Sunday morning!
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Note: This offer is also available on our other premium newsletters.
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You will instantly receive the current May 2026 edition when you join, and be on the list to get the new June 2026 edition when we publish it this Sunday morning!
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The same $299 lifetime plan offer is available on our other premium newsletters during this SD Lifetime Event...
A description of each of our premium newsletters is below (including the Sure Dividend Core Newsletter):
To your compounding dividend income,
Ben Reynolds
Founder, Sure Dividend
P.S. The new June 2026 edition of the Sure Dividend Core Newsletter goes live this Sunday morning! Click here to join the lifetime plan for just one payment of $299.
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