Investing in dividend stocks is a strategic approach for generating consistent income and building wealth over time. The UK stock market offers numerous opportunities for dividend investors, characterized by stability, long-term growth, and solid yields.
In this article, we examine some of the best dividend stocks in the UK for 2024, focusing on well-established companies with strong dividend yields.
List of the best UK dividend stocks in 2024:
British American Tobacco: 9.67% dividend yield
HSBC Holdings: 7.20% dividend yield
Rio Tinto: 6.50% dividend yield
National Grid: 6.07% dividend yield
NatWest Group: 5.60% dividend yield
Lloyds Banking Group: 5.48% dividend yield
Dividend yields are based on the trailing twelve-month periods.
The 6 best UK dividend stocks in 2024
Check leading companies that are paying a stable dividend and are based in the United Kingdom.
1. British American Tobacco
British American Tobacco (BAT) is a leading global tobacco company. Despite the regulatory challenges and declining smoking rates in developed markets, BAT has maintained strong financial performance through product innovation and expansion into new categories, such as vaping products.
According to Yahoo Finance, the company plans to spend 700 million GBP on buybacks in 2024 and 900 million GBP in 2025, which could help support the company’s high dividend payouts. BAT’s high dividend yield, coupled with its strong market position and diversified product portfolio, makes it a compelling choice for dividend investors. British American Tobacco is listed on the NYSE under the BTI ticker symbol and on the London Stock Exchange under BATS.
Sector: Tobacco
Market Capitalization: 52.93 billion GBP
Dividend Yield (TTM): 9.67%
1-Year Performance: -6.90%
2. HSBC Holdings
HSBC Holdings is one of the largest banking and financial services organizations in the world. The bank has a substantial presence in Asia, which is a significant driver of its growth. HSBC’s strong capital position and diversified revenue streams support its consistent dividend payments.
In the past year, HSBC saw solid growth in the markets, which has helped support an increase in the dividend payout. The bank’s stock is trading on the LSE under the HSBA ticker symbol and under HSBC on the NYSE. HSBC’s robust dividend yield and strategic focus on high-growth regions make it an attractive investment for income-focused investors.
Sector: Finance
Market Capitalization: 126.65 billion GBP
Dividend Yield (TTM): 7.20%
1-Year Performance: 13.12%
3. Rio Tinto
Rio Tinto is a leading global mining group, focusing on the extraction and production of minerals such as nickel, iron ore, aluminum, copper, and diamonds. The company’s strong balance sheet and operational efficiency enable it to deliver substantial dividends to its shareholders.
The company’s stock is trading on the NYSE and LSE under the same ticker, RIO. Rio Tinto’s commitment to returning value to shareholders through dividends, combined with its diversified mineral portfolio, makes it a solid pick for dividend investors.
Sector: Non-Energy Minerals
Market Capitalization: 89.38 billion GBP
Dividend Yield (TTM): 6.50%
1-Year Performance: 2.77%
4. National Grid
National Grid is a major player in the UK’s energy sector and is responsible for the transmission and distribution of electricity and gas. The company’s regulated business model ensures stable cash flows, which support its strong dividend payouts.
Earlier this year, the company announced a 60 billion GBP project that will start in 2024 and run through 2029 to fund green energy transition in the UK. The company’s stock is trading on the NYSE under the NGG symbol. The National Grid’s reliable dividend payments and critical role in the UK’s energy infrastructure make it a dependable choice for income investors.
Sector: Utilities
Market Capitalization: 41.47 billion GBP
Dividend Yield (TTM): 6.07%
1-Year Performance: -7.48%
5. NatWest Group
NatWest Group, formerly known as Royal Bank of Scotland, is a major UK banking group offering a wide range of financial services. The bank has undergone significant restructuring in recent years, improving its financial stability and capacity to pay dividends.
As part of its modernization efforts, NatWest released Cora+ last year. Cora is a virtual chatbot that helps customers with various tasks. Just one year after its launch, the bot handled 10.8M queries, double the number of queries it handled in 2023. NatWest’s stock is trading on the NYSE under the NWG symbol and under NG on the LSE.
Sector: Finance
Market Capitalization: 25.27 billion GBP
Dividend Yield (TTM): 5.60%
1-Year Performance: 18.21%
6. Lloyds Banking Group
Lloyds Banking Group is one of the largest retail and private banks in the UK. The bank’s focus on digital transformation and customer service has enhanced its operational efficiency and financial performance, supporting its ability to pay consistent dividends.
Despite Lloyd’s impressive dividend yield and robust market performance of the LYG stock in the past year, Lloyds is considering cutting its workforce by 2,500 due to poorer-than-expected mortgage results. At the same time, the bank invested a considerable amount of funds in fintech and green initiatives, which could pay dividends (no pun intended) in the future.
Sector: Finance
Market Capitalization: 38.2 billion GBP
Dividend Yield (TTM): 5.48%
1-Year Performance: 16.90%
The bottom line
The companies listed above are among the best dividend stocks in the UK for 2024, offering a combination of high yields, financial stability, and growth potential. When selecting dividend stocks, it is essential to consider factors such as dividend sustainability, payout ratios, and the overall financial health of the company to ensure a reliable income stream.
If you want to explore more dividend investment opportunities, you can check out our lists of the best dividend stocks for the following countries:
6 Best Dividend Stocks in India in 2024
5 Best Dividend Stocks in Canada in 2024
5 Best Dividend Stocks in Australia in 2024