Investing in dividend stocks is a tried-and-true strategy for those looking to generate steady income while benefiting from long-term capital appreciation. While this has become quite popular on the USA, this is gaining traction as well in the UK market, where there are several companies that stand out for their ability to consistently reward shareholders with dividends, supported by strong earnings growth and robust business models. On this post we have made a selection of the Top 10 UK dividend stocks that combine high yields, dividend growth, and financial stability. If you want to be a bit more diversified, you may want to have a look on our ‘Top 25 – UK Dividends‘ pie, where we focused on a list of consistent dividend payers with dividend growth on last 3 and 5 years, that are growing their earnings while keeping a ‘high yield’. We are also running a £10 / week challenge on dividend stocks on which we have an addition on every week. But well, let’s focus on this article now, and see what we see as Top 10 UK Dividend Stocks!
1. Persimmon plc (Ticker: PSN)
Yield: 5.0%
Dividend Growth: Moderate (3Y and 5Y), although recently being reduced
Earnings Growth: Strong (3Y and 5Y)
Consecutive Years Paying Dividends: 10+
Persimmon is one of the UK’s leading housebuilders, benefitting from a steady demand for residential construction. Its generous dividend yield of 5% makes it an attractive choice for income investors. The company’s strong earnings growth over three and five years underscores its resilience, even during economic downturns, and now government is meant to increase considerably the construction of houses, so maybe their time to a come back?
2. Phoenix Group Holdings (Ticker: PHNX)
Yield: 10.53%
Dividend Growth: Strong
Earnings Growth: Strong (3Y and 5Y)
Consecutive Years Paying Dividends: 10+
Phoenix Group is a leading specialist in insurance and pension fund management. Its near-double-digit yield is complemented by strong dividend growth and solid earnings performance, making it a standout choice. Phoenix’s focus on financial stability and cash flow ensures it remains a reliable dividend payer for income-focused portfolios, however on the bad side, you may not like that only pays a couple of times a year instead of the traditional quarterly dividend. Their next ex-div date is forecasted for 10 April 2025 with a forecasted dividend payment on 21 May 2025.
3. British American Tobacco (Ticker: BATS)
Yield: 7.8%
Dividend Growth: Moderate
Earnings Growth: Consistent
Consecutive Years Paying Dividends: 25+
As a global leader in the tobacco industry, British American Tobacco is a dividend stalwart. Its yield of 7.8% is bolstered by decades of consistent payouts. While the tobacco industry faces regulatory pressures, BATS’s diversification into reduced-risk products and consistent earnings growth provide confidence in its ability to maintain and grow dividends. For information, their forecasted ex-div date is 27 Mar 2025 with a forecasted payment on 7 May 2025, they pay quarterly their dividends.
4. Imperial Brands (Ticker: IMB)
Yield: 5.84%
Dividend Growth: Slight
Earnings Growth: Consistent
Consecutive Years Paying Dividends: 20+
Imperial Brands, another tobacco giant, offers a yield of 5.84%. While its dividend growth has been modest, the company’s ability to consistently generate cash flow ensures stable payouts. For investors seeking high yields with relatively low risk, Imperial Brands remains a solid choice. Their next ex-div date is 20 Feb 2025 with payment on 31 Mar 2025.
5. Aviva plc (Ticker: AV.)
Yield: 6.7%
Dividend Growth: Strong
Earnings Growth: Moderate to Strong
Consecutive Years Paying Dividends: 10+
Aviva, a major player in the insurance sector, offers a yield of nearly 7% alongside impressive dividend growth. The company’s ongoing restructuring and focus on core markets have strengthened its financial position. With robust earnings growth supporting its dividend policy, Aviva is an appealing option for long-term investors. Once again, this stocks is not paying quarterly and although they have been paying for over 10 years, their dividends are quite unpredictable in size.
6. Legal & General Group (Ticker: LGEN)
Yield: 8.76%
Dividend Growth: Strong
Earnings Growth: Strong (3Y and 5Y)
Consecutive Years Paying Dividends: 15+
Legal & General is a financial services powerhouse, specialising in insurance and investment management. Its strong dividend growth and reliable earnings performance make it a top pick for those seeking a combination of income and growth. The company’s emphasis on sustainability and long-term strategies further enhances its appeal.
7. Vodafone Group (Ticker: VOD)
Yield: 8.72%
Dividend Growth: Moderate
Earnings Growth: Stable
Consecutive Years Paying Dividends: 10+
Vodafone is a telecommunications giant with a global footprint. Its 8.72% yield and consistent dividend payments reflect its strong cash flow generation. While growth in the telecom sector has been moderate, Vodafone’s efforts in expanding its 5G network and digital services provide avenues for future growth.
8. HSBC Holdings (Ticker: HSBA)
Yield: 5.85%
Dividend Growth: Moderate
Earnings Growth: Stable
Consecutive Years Paying Dividends: 20+
HSBC is one of the world’s largest banks, offering a yield of 5.85%. Its diversified revenue streams across geographies provide stability, even during periods of market volatility. The bank’s moderate dividend growth and long track record of payments make it another reliable choice for income investors.
9. SSE plc (Ticker: SSE)
Yield: 3.87%
Dividend Growth: Moderate
Earnings Growth: Stable to Slight Growth
Consecutive Years Paying Dividends: 15+
SSE, a leading energy company, delivers a solid yield of 3.87% backed by consistent earnings and moderate dividend growth. Its investments in renewable energy and infrastructure position it well for future growth while maintaining its commitment to rewarding shareholders. It has the lowest yield, but maybe high potential on capital apreciation.
10. GlaxoSmithKline (Ticker: GSK)
Yield: 4.5%
Dividend Growth: Moderate
Earnings Growth: Moderate
Consecutive Years Paying Dividends: 15+
GlaxoSmithKline, a pharmaceutical giant, combines a yield of 4.5% with stable dividend payments. Its focus on innovation and growth in key therapeutic areas supports its financial stability. For those looking for exposure to the healthcare sector with reliable income, GSK is an excellent choice.
What are your thoughts?
While we prefer the traditional dividend champions, aristocrats and kings stocks from the USA, we are considering increasing our holdings on the UK Market. Firstly, we would get reduced some FX fees but also, there are higher dividend yields, however, in the other side, historically UK stocks have been offering less return that their counterparts in the USA. Regardless of your choice, these kind of stocks represent a mix of high yields, consistent dividend growth, and financial stability. While past performance is no guarantee of future results, these companies have demonstrated resilience and a commitment to rewarding shareholders over the years.
Tips for Dividend Investors:
Before we finish with the post, here you have some tips:
- Diversify your portfolio across sectors to reduce risk. Remember that we have in our recently created pie more UK Dividend Stocks yielding above 3%
- Monitor the sustainability of dividend payments by analysing payout ratios and earnings trends.
- Reinvest dividends to maximise compounding over time. Remember how it works the art of compound interest in the stock market
- Do your own research!
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