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In the quest for reliable income streams, dividend stocks often emerge as attractive options for investors in the United Kingdom, boasting yields that can significantly outpace average returns. However, while some companies consistently reward shareholders with stable or increasing dividends, others present a riskier proposition due to past reductions in their payouts. It's crucial for investors to carefully evaluate each stock's dividend history and financial health before committing funds, as not all dividends are a promise of future performance.
Top 10 Dividend Stocks In The United Kingdom
| Name | Dividend Yield | Dividend Rating |
| Record (LSE:REC) | 8.79% | ★★★★★★ |
| Keller Group (LSE:KLR) | 4.18% | ★★★★★☆ |
| Dunelm Group (LSE:DNLM) | 7.14% | ★★★★★☆ |
| Plus500 (LSE:PLUS) | 6.95% | ★★★★★☆ |
| DCC (LSE:DCC) | 3.45% | ★★★★★☆ |
| Rio Tinto Group (LSE:RIO) | 6.52% | ★★★★★☆ |
| Grafton Group (LSE:GFTU) | 3.60% | ★★★★★☆ |
| James Latham (AIM:LTHM) | 3.25% | ★★★★★☆ |
| Big Yellow Group (LSE:BYG) | 4.47% | ★★★★★☆ |
| Hargreaves Services (AIM:HSP) | 6.50% | ★★★★★☆ |
Click here to see the full list of 60 stocks from our Top Dividend Stocks screener.
We'll examine a selection from our screener results and one of the companies to avoid.
One To Reconsider
Barratt Developments (LSE:BDEV)
Simply Wall St Dividend Rating: ★★★☆☆☆
Overview: The company operates in the housebuilding sector within the United Kingdom, with a market capitalization of approximately £4.42 billion.
Operations: The company's revenue, primarily generated from housebuilding activities, amounts to approximately £4.39 billion.
Dividend Yield: 6.1%
Barratt Developments, despite trading 24.8% below its fair value and offering a high dividend yield of 6.12%, presents concerns for dividend investors. Its dividends are not well supported, evidenced by a payout ratio of 124.7% and a cash payout ratio exceeding 150%, indicating payments are not covered by earnings or cash flows. Additionally, the company's profit margins have dropped from 9.4% to 5%. Recent events include a significant interim dividend cut from 10.2 pence to 4.4 pence per share, alongside disappointing half-year earnings with sales dropping to £1.85 billion from £2.78 billion and net income falling drastically to £68.8 million from £380.5 million year-over-year, challenging the sustainability of future dividends despite the company's intention to maintain its dividend policy.
Top Pick
RS Group (LSE:RS1)
Simply Wall St Dividend Rating: ★★★★★☆
Overview: RS Group plc is a global distributor of electronics and industrial products, operating in countries including the United Kingdom, the United States, France, Germany, Italy, and Mexico, with a market capitalization of approximately £3.44 billion.