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- ☕️ Sunday Coffee: What’s MaxRatio (and Why It Matters)?
☕️ Sunday Coffee: What’s MaxRatio (and Why It Matters)?
Serhio MaxDividends
June 29, 2025
MaxDividends Mission: Helping & Supporting Everyone in Building a Growing Passive Income, Retiring Early, and Living Off Dividends.
No one wants to work forever, and the question of financial security becomes more pressing. Can we really count on enjoying life after retiring, without having to find another job just to make ends meet?
What’s MaxRatio (and Why It Matters)?
MaxRatio is a custom metric developed by the MaxDividends team to help spot companies with strong long-term dividend potential. It’s designed for investors who want to grow a solid stream of passive income over time—not just chase quick returns.
Basically, MaxRatio highlights companies that combine solid current dividend payouts and strong dividend growth. It helps you focus on the businesses that are set up to deliver real results over the long haul.
How to Read MaxRatio
Lower MaxRatio (below 4)
Usually means the company is more focused on reinvesting in growth. These are typically fast-growing businesses that don’t pay much in dividends now, but could offer serious capital appreciation.
Higher MaxRatio (above 8)
Points to companies with a strong dividend focus. These stocks either: pay generous dividends today and increase them steadily over time or start with a smaller payout but have a history of raising dividends aggressively every year.
Mid-range MaxRatio (between 4 and 8)
Signals a balanced company—one that’s growing and rewarding shareholders at the same time. These are often sweet spots for long-term dividend investors.
The MaxRatio is calculated using current dividend yield, dividend growth over the past 3, 5, and 10 years, and the company’s latest Financial Score.
It’s one of the best ways we’ve found to cut through the noise and find dividend stocks that are actually built to last.
How I Use MaxRatio for My Own Investing
I’ve got three kids, and for their portfolios, I focus on solid, reliable companies with a Financial Score of 95 or higher and a MaxRatio under 4.
That way, I’m leaning more into long-term capital growth while still making sure the companies pay dividends — and raise them every year. I don’t know if the kids will want to keep these stocks later on, but in 15–20 years, some of these businesses could become serious income machines that grow for decades.
Once they turn 20, they’ll get full ownership and control of their stock portfolios — a head start I wish I had.
For the portfolios my wife and I manage together, I take a different approach. I focus more on balance — quality companies with strong dividend income and solid dividend growth. I usually screen for stocks with a Financial Score of 90+ (the higher, the better) and a MaxRatio of 8 or more.
At this point in my life, I’m less focused on chasing capital growth. What matters more is preserving what we’ve built — and making sure our monthly passive income keeps growing.
The idea is, within 10 years or so, we plan to be traveling more, and I’ll want a steady, no-drama cash generator flowing into our bank account. That’s where consistent dividend payers with a track record of regular increases (and zero hand-holding) really shine.
Where to Find MaxRatio?
In the MaxDividends app, just head to the Company Analytics section. You can quickly check any stock you’re interested in — see the Financial Score and the MaxRatio in one place. It saves a ton of time.
And when you combine that with the stock screener, finding high-quality dividend plays becomes surprisingly easy — sometimes just a couple of clicks away.
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With MaxDividends Community you’ll always be part of a winning team and stop viewing the future as an uncertainty. Worry will fade, replaced by confidence and peace of mind. You’ll focus on doing what you love while your passive income continues to grow.
With respect for your well-being, Max
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With MaxDividends Community you’ll always be part of a winning team and stop viewing the future as an uncertainty. Worry will fade, replaced by confidence and peace of mind. You’ll focus on doing what you love while your passive income continues to grow.
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What You’ll Get by Joining MaxDividends Premium
The most important thing our MaxDividends community members value us for
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Ready to Give It a Try?
Check Your Subsription Status & Upgrade to Premium.
If you have any questions, feel free to email me at: [email protected]
MaxDividends is a Bestseller on Substack!
Hundreds of premium members have already discovered the benefits of the community and app, earning passive income through dividends with MaxDividends. Their passive income keeps growing!
MaxDividends Community: What ELSE You’ll Get Here
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*Disclaimer: This article reflects the author’s personal opinions and is intended for educational and entertainment purposes only. It does not constitute financial advice in any form. Always do your own research and consult a licensed financial advisor. The author may hold positions in some of the stocks mentioned, in line with the views expressed. This is a disclosure, not a recommendation to buy or sell any securities.