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The UK market has recently faced challenges, with the FTSE 100 index closing lower due to weak trade data from China and declining commodity prices impacting key sectors. Amidst these economic headwinds, dividend stocks can offer a reliable income stream for investors seeking stability and potential returns. Here are three UK dividend stocks yielding up to 6.9% that may be worth considering in this environment.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 57 stocks from our Top UK Dividend Stocks screener.

Let's take a closer look at a couple of our picks from the screened companies.

Anglo-Eastern Plantations

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Anglo-Eastern Plantations Plc, with a market cap of £243.25 million, owns, operates, and develops agriculture plantations in Indonesia and Malaysia.

Operations: Anglo-Eastern Plantations Plc generates $364.23 million from the cultivation of plantations in Indonesia and Malaysia.

Dividend Yield: 3.7%

Anglo-Eastern Plantations (AEP) has a low payout ratio of 10.7%, indicating dividends are well-covered by earnings, and a cash payout ratio of 24.4%, ensuring sustainability from cash flows. However, the dividend yield is relatively low at 3.71% compared to the UK market's top tier (5.48%). Despite increasing over the past decade, AEP's dividends have been volatile with significant drops exceeding 20%. Recent earnings showed an increase in net income to US$27.87 million for H1 2024 despite lower production figures announced in August.

• Click here to discover the nuances of Anglo-Eastern Plantations with our detailed analytical dividend report.

• Upon reviewing our latest valuation report, Anglo-Eastern Plantations' share price might be too pessimistic.

HSBC Holdings

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: HSBC Holdings plc offers banking and financial services globally, with a market cap of £120.74 billion.

Operations: HSBC Holdings plc generates revenue through its Commercial Banking ($15.43 billion), Global Banking and Markets ($16.16 billion), and Wealth and Personal Banking ($40.10 billion) segments.

Dividend Yield: 7.0%

HSBC Holdings' dividend yield is in the top 25% of UK payers, with a reasonable payout ratio of 52.5%, ensuring coverage by earnings. However, its dividend history is volatile and has been paid for less than 10 years. The company faces challenges with a high level of bad loans (2.2%) and low allowance for these loans (46%). Recent news includes a $1.85 billion interim dividend approval and potential sale of South African businesses to focus on Asian markets.

• Dive into the specifics of HSBC Holdings here with our thorough dividend report.

• Our comprehensive valuation report raises the possibility that HSBC Holdings is priced lower than what may be justified by its financials.

ME Group International

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: ME Group International plc operates, sells, and services a range of instant-service equipment in the United Kingdom with a market cap of £730.68 million.

Operations: ME Group International plc generates revenue of £304.20 million from its Personal Services - Others segment.

Dividend Yield: 4.1%

ME Group International's interim dividend increased by 16.2% to 3.45 pence per share, returning £13 million to shareholders, despite a historically volatile dividend record. Recent earnings showed sales of £150.36 million and net income of £22.63 million for H1 2024, indicating growth from the previous year. The company's cash payout ratio is high at 87.4%, but dividends are covered by earnings with a payout ratio of 56.1%. A new partnership with Motor Fuel Limited aims to install up to 300 energy-efficient laundry machines across UK sites over five years, potentially boosting future revenue streams.

• Get an in-depth perspective on ME Group International's performance by reading our dividend report here.

• Our expertly prepared valuation report ME Group International implies its share price may be lower than expected.

Where To Now?

• Unlock more gems! Our Top UK Dividend Stocks screener has unearthed 54 more companies for you to explore.Click here to unveil our expertly curated list of 57 Top UK Dividend Stocks.

• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.

• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LSE:AEP LSE:HSBA and LSE:MEGP.

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