Best UK Stocks for Dividends 2024
When it comes to choosing the best stocks to invest in, dividend-paying stocks are high on the list for many investors. And why not? If an investor can pick some of the best shares for dividends UK, then they could potentially receive growth in the share price and regular income payments in the form of dividends.
In this 'Best UK Stocks for Dividends' article, we cover a range of stocks that pay the best dividends to watch for this year. While we can never tell which investments will work out the best in the future, we can perform extensive research and exercise proper risk management to put the probabilities more in our favour. Let's dive in!
Table of Contents
5 Top UK Dividend Shares List
Below is a list of top dividend stocks to watch. With a variety of sectors to choose from such as retail, energy, and financial services, many candidates can make the list of the best dividend stocks to invest in. While most companies will pay out quarterly dividends, some will pay dividends monthly. You can learn more about these in the Top Monthly Dividend Stocks UK to Watch article.
Here is a list of the top dividend stocks to watch this year. Dividend yields are based on values at the start of 2024:
- Vodafone Group (LSE: VOD) - Dividend Yield 10.94%
- M&G (LSE: MNG) - Dividend Yield 10.38%
- Glencore (LSE: GLEN) - Dividend Yield 8.3%
- Taylor Wimpey (LSE: TW) - Dividend Yield 9.15%
- Imperial Brands (LSE IMB) - Dividend Yield 8.03%
Top Ranked Dividend Stocks UK Research
The UK stock market is a very popular place for investors to find UK shares with the best dividends. The stock market houses some of the biggest companies in the world, which operate on a global scale. It is no coincidence that some of the best UK shares have a high correlation with high-yield stocks. Here is a selection of just a few stocks that pay some of the best dividends in the UK that are worthy of more analysis.
1. Vodafone Group
Multinational British telecommunications company Vodafone has operations in Europe, Asia, Africa and Oceania. At the time of writing, Vodafone had an annual dividend yield of 10.94% - one of the highest dividends of companies listed in the FTSE 100 index. The quarterly dividend amount is 1.94 GBX.
Vodafone's share price forecast has struggled in recent years due to its high debt load. However, in June 2023 the company announced a potential merger with UK mobile operator Three. If a deal is successful it will create the largest mobile phone operator in the UK taking their combined market share past the EE (BT Group) and O2 (Virgin Media) networks, making 2024 and interesting year for the stock.
2. M&G
M&G is a global investment manager that provides savings and investment products. Since de-merging with Prudential PLC it has become one of the companies listed in the FTSE 100 index which represents the largest 100 companies listed on the London Stock Exchange by market capitalisation. Currently, M&G has a dividend yield of 10.38% and pays out a quarterly dividend of 4.90 GBX.
The management team announced a "transformation" plan to improve wholesale inflows and reduce the headcount. In early 2023, the group reported a rise in net client inflows of £400 million which was greater than the £300 million for the same time the prior year. However, the inflows offset the £900 million of outflows from its institutional clients which has been cited as a cause of the UK mini-budget crisis in September 2022. The UK election in 2024, is likely to have a big impact on the investment industry in the UK so it is a theme to watch.
3. Glencore
A Swiss multinational mining and commodity trading company, Glencore has shares listed on the London Stock Exchange which currently has an annual dividend yield of 8.37%. The quarterly dividend return is 9.15 GBX.
Glencore's share price performed well in the aftermath of the pandemic but has stagnated over the past several years. While the mining company's post-tax profits tripled last year, the share price has struggled. Even though China has reopened its economy, the generally weaker global economic activity has seen a fall in demand for commodity products. However, the strong dividend available may help investors prioritise income over growth.
4. Taylor Wimpey
One of the largest home building companies in the UK - which also operates in international markets - Taylor Wimpey currently has an annual dividends yield of 9.15% and pays out a quarterly dividend return of 2.35 GBX.
While the UK faces a housing crisis with more homes needed than are being built, Taylor Wimpey stated that 2023 could be a challenging year for it due to a weak economic backdrop and affordability concerns due to higher mortgage interest rates. However, the fall in home completions and sales activity this year may already be priced into the share price as most housebuilder stocks in the UK could be seen as undervalued.
5. Imperial Brands
The fourth-largest international cigarette company, Imperial Brands currently pays an 8.03% dividends yield with a 35.43 GBX quarterly dividend payout. As Tobacco companies tend to be high-cash businesses, they also tend to pay out the highest amount of dividends per quarter.
While the demand for smoking tobacco among millennials in the Western world is decreasing, Imperial Brands does have several popular vaping brands. Of course, with a rise in the interest of investing ethically, Imperial Brands is not considered to be an ethical stock.
How to Invest in the UK Best Dividend Stocks
If you are considering investing in the stock market and are looking to build a portfolio of the best UK shares for dividends, then you need access to the top investment products available.
You can open a live trading account to start investing in dividend stocks from all around the world with the Admirals Invest.MT5 account. Alternatively, you can open a demo practice trading account to get started.
Below is a step-by-step process on how to do so using the MetaTrader 5 web platform provided by Admirals for free.
- Login to the Admirals Dashboard where you can access different accounts, expert tools and deposit and withdrawal options.
- To open your trading platform, click on the Trade icon next to the relevant account name.
- From the MetaTrader 5 web platform, type in the name of the stock to view a live price chart of the stock.
- Click on Create New Order to open a trading ticket to input the number of shares you wish to purchase.
How Dividend Stocks Work
What are dividend stocks? Dividend stocks are shares in public companies where those companies pay shareholders a slice of company profits. Dividends are usually paid out every quarter and are a way for shareholders to participate in the success of the company. Most dividends are cash dividends.
These are cash payments made on a per-share basis to investors. For example, a company pays out $3.13 per share every quarter in dividend payments - this is known as the dividend amount.
What is a Dividend Yield? The dividend yield is the annual dividend divided by the share price (Dividend Yield = Annual Dividend / Share Price). So, using the example above, the annual dividend would be $3.13 multiplied by four quarterly payments, which amounts to $12.52. If the share price closed at $400.23 this means that the dividend yield is 3.1% ($12.52 / $400.23).
Conclusion
Identifying the best UK stocks for dividends can help to grow a portfolio in the long term. While the task is not easy, earning regular income from holding company shares can help offset the rise or fall in its share price. Using metrics such as dividend yields, investors can quickly identify which are the best stocks for dividend income. However, further research needs to be done to find the top UK dividend shares to invest in. Ideally, the company should also have strong long-term growth prospects and you should be comfortable with the level of risk in investing in the stock market.
Continue Reading:
- A Guide to Dividend Investing
- Best UK Shares to Watch
- Best UK Value Stocks
- Best Monthly Dividend Stocks UK
- 6 Short Term Investments UK
- Best Bond ETFs UK
- Best Vanguard Funds UK
- Best Income Funds UK
- How to Trade the US Stock Market
- The CFD Trading Guide
FAQs on the Best UK Stocks for Dividends
What is dividend yield?
The dividend yield is the annual dividend divided by the share price (Dividend Yield = Annual Dividend / Share Price).
Are dividend stocks a good buy?
If you can pick the right dividend stocks then you may be able to receive income from just owning the stock, as well as a capital gain if the share price rises.
What are the best UK dividend shares 2024?
Some of the top UK dividend shares to watch in 2024 include Vodafone Group, M&G, Glencore, Taylor Wimpey and Imperial Brands, among others.
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Disclaimer: This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
