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UK Dividend Stocks Featuring Dunelm Group And Two More For Income Growth

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The UK stock market has recently faced challenges, with the FTSE 100 index experiencing declines due to weak trade data from China and falling commodity prices impacting major companies. As economic uncertainties persist, investors often turn to dividend stocks for their potential to provide a steady income stream, making them an attractive option in volatile markets.

Top 10 Dividend Stocks In The United Kingdom

Name

Dividend Yield

Dividend Rating

WPP (LSE:WPP)

7.31%

★★★★★★

Man Group (LSE:EMG)

8.14%

★★★★★☆

Keller Group (LSE:KLR)

3.59%

★★★★★☆

Treatt (LSE:TET)

3.48%

★★★★★☆

4imprint Group (LSE:FOUR)

5.81%

★★★★★☆

Big Yellow Group (LSE:BYG)

4.68%

★★★★★☆

Grafton Group (LSE:GFTU)

4.20%

★★★★★☆

OSB Group (LSE:OSB)

7.65%

★★★★★☆

James Latham (AIM:LTHM)

7.52%

★★★★★☆

NWF Group (AIM:NWF)

4.48%

★★★★★☆

Click here to see the full list of 64 stocks from our Top UK Dividend Stocks screener.

Let's dive into some prime choices out of the screener.

Dunelm Group

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

Overview: Dunelm Group plc operates as a retailer of homewares in the United Kingdom with a market capitalization of £2.18 billion.

Operations: The company's revenue primarily comes from its homewares retail segment, which generated £1.73 billion.

Dividend Yield: 7.2%

Dunelm Group has demonstrated a strong dividend yield, ranking in the top 25% of UK dividend payers. Despite a volatile dividend history, recent announcements include an interim and special dividend totaling £104.2 million. The company's dividends are covered by earnings and cash flows, with payout ratios of 58.6% and 52.6%, respectively. Recent sales updates show growth, with total year-to-date sales reaching £1.36 billion as of March 2025, supporting its capacity to sustain dividends.

LSE:DNLM Dividend History as at Apr 2025
LSE:DNLM Dividend History as at Apr 2025

Games Workshop Group

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

Overview: Games Workshop Group PLC designs, manufactures, distributes, and sells fantasy miniature figures and games globally, with a market cap of £4.82 billion.

Operations: Games Workshop Group PLC generates revenue through its Core segment, which accounts for £528.50 million, and its Licensing segment, contributing £49 million.

Dividend Yield: 3.7%

Games Workshop Group's dividend yield of 3.7% is below the top UK payers, yet it has consistently increased over 10 years. Recent dividends total £5.20 per share for 2024/25, up from £4.20 the previous year, reflecting surplus cash distribution policy. Despite stable earnings growth and reliable payments, sustainability concerns arise due to a high cash payout ratio of 111.6%. Recent board changes and product announcements may influence future financial performance and dividend capacity.