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Recent data indicating a slowdown in China has impacted the UK's FTSE 100 and FTSE 250 indices, signaling caution in the markets as global economic challenges persist. In such uncertain times, investors often look to dividend stocks for their potential to provide steady income streams, making them an appealing option amidst fluctuating market conditions.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 55 stocks from our Top UK Dividend Stocks screener.

Let's explore several standout options from the results in the screener.

Alumasc Group

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

Overview: The Alumasc Group plc operates globally, manufacturing and distributing building products, systems, and solutions with a market capitalization of approximately £81.19 million.

Operations: Alumasc Group plc generates its revenue from three primary segments: Water Management (£42.29 million), Building Envelope (£34.92 million), and Housebuilding Products (£14.79 million).

Dividend Yield: 4.6%

Alumasc Group's dividend history shows instability with significant drops, yet its current yield of 4.58% is below the UK market's top quartile. Dividends are well-supported by a cash payout ratio of 31.2% and an earnings payout ratio of 46.6%. Despite past volatility, recent corporate guidance indicates a positive outlook with expected revenue growth of 6.5% and improved profits for FY2024, suggesting potential for future dividend stability and growth amidst challenging industry conditions.

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

• Our valuation report here indicates Alumasc Group may be undervalued.

James Latham

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

Overview: James Latham plc operates in the import and distribution of timber, panels, and decorative surfaces across the UK, Ireland, other parts of Europe, and internationally, with a market cap of approximately £272.23 million.

Operations: James Latham plc generates £366.51 million from its timber importing and distribution segment.

Dividend Yield: 5.8%

James Latham's recent declaration of a special dividend of 45 pence and an increased annual dividend to 33.75 pence, covered 3.3 times by earnings, highlights its strong financial position despite a sales drop to £366.51 million and lower net income of £22.66 million in FY2024. With a stable ten-year dividend history and a high yield of 5.77%, the dividends are well-supported by both earnings (30% payout ratio) and cash flows (87.4% cash payout ratio). The company is also actively seeking acquisitions to bolster market presence, indicating strategic growth ambitions alongside reliable shareholder returns.

• Click here to discover the nuances of James Latham with our detailed analytical dividend report.

• Insights from our recent valuation report point to the potential overvaluation of James Latham shares in the market.

Paragon Banking Group

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

Overview: Paragon Banking Group PLC, operating in the United Kingdom, offers a range of financial products and services with a market capitalization of approximately £1.61 billion.

Operations: Paragon Banking Group PLC generates its revenue primarily from mortgage lending and commercial lending, with contributions of £281.30 million and £133.70 million respectively.

Dividend Yield: 5.1%

Paragon Banking Group reported a significant rise in half-year net income to £81.9 million, up from £37.9 million, reflecting robust earnings growth. Despite this, the company's dividend track record over the past decade has been unstable and unreliable with periods of high volatility. The dividends are currently covered by earnings with a payout ratio of 43% and by cash flows at a low cash payout ratio of 3.3%. Additionally, Paragon has been active in share buybacks, repurchasing shares worth £50 million recently, suggesting confidence in its financial health but also highlighting potential concerns about dividend sustainability given past inconsistencies.

• Dive into the specifics of Paragon Banking Group here with our thorough dividend report.

• Our valuation report unveils the possibility Paragon Banking Group's shares may be trading at a discount.

Where To Now?

• Reveal the 55 hidden gems among our Top UK Dividend Stocks screener with a single click here.

• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.

• Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide.

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 AIM:ALU AIM:LTHM and LSE:PAG.

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