Top 22 UK Dividend Growth Stocks: Expert Picks for High Returns

Are you looking to secure consistent income and long-term growth? Let’s explore the UK dividend growth stocks together. Ready to dive in?

If you answered yes, then you’re in the right place. UK dividend growth stocks offer a compelling opportunity for investors seeking stability and potential for wealth accumulation over time. 

In this article, we’ll delve into the landscape of UK dividend-paying companies, uncovering hidden gems and established performers alike. Whether you’re a seasoned investor or just starting out, join us as we navigate the intricacies and potential of UK dividend growth stocks. Let’s begin our journey to financial prosperity together.

Relx PLC

Relx PLC offers a steady dividend yield of 1.71% with a manageable payout ratio of 58.38%. Its consistent performance and focus on innovation make it an attractive pick for investors seeking reliable income streams.

>> Relx PLC Dividend History

British American Tobacco

Offering a robust dividend yield of 9.95% and a sustainable payout ratio of 59.13%, British American Tobacco presents a compelling investment opportunity. Its strong global presence and resilience in the face of regulatory challenges underline its attractiveness to income-focused investors.

>> British American Tobacco Dividend History

Lloyds Banking:

Lloyds Banking boasts a dividend yield of 5.35% and a conservative payout ratio of 33.60%, reflecting its commitment to rewarding shareholders while maintaining financial health. Its leading position in the UK banking sector adds to its appeal for dividend-seeking investors.

>> Lloyds Banking Dividend History

WPP

Despite a high dividend yield of 5.32%, WPP’s payout ratio of 400.44% raises concerns about the sustainability of its dividend policy. Investors should closely monitor its performance and financial metrics for potential risks.

>> WPP Dividend History

Anglo American

Anglo American offers a dividend yield of 3.96% but with a notably high payout ratio of 561.02%. Investors should exercise caution due to the elevated payout ratio, which may indicate potential challenges in sustaining dividend payments in the long term.

>> Anglo American Dividend History

Unilever

Unilever provides a dividend yield of 3.74% alongside a reasonable payout ratio of 66.92%. Its strong brand portfolio and global presence contribute to its appeal for income-oriented investors seeking stability and growth potential.

>> Unilever Dividend History

GSK

GSK presents a dividend yield of 3.43% and a moderate payout ratio of 46.93%, reflecting its commitment to returning value to shareholders while ensuring financial sustainability. Its diversified healthcare business and robust pipeline further support its dividend prospects.

>> GSK Dividend History

Reckitt Benckiser

Reckitt Benckiser offers a dividend yield of 4.42% with a payout ratio of 82.19%. While its dividend yield is attractive, investors should carefully assess the sustainability of its high payout ratio and potential impact on future dividend payments.

>> Reckitt Benckiser Dividend History

Imperial Brands

Imperial Brands boasts a high dividend yield of 8.43% and a reasonable payout ratio of 56.54%, making it an appealing choice for income-focused investors. Its strong position in the tobacco industry and potential for long-term growth enhance its investment appeal. 

>> Imperial Brands Dividend History

BP:

With a solid dividend yield of 4.54% and a conservative payout ratio of 32.34%, BP remains an attractive choice for income investors seeking stability in the energy sector. Its global presence and commitment to sustainable practices further bolster its appeal.

>> BP Dividend History

Rio Tinto

Offering a generous dividend yield of 7.00% and a manageable payout ratio of 65.21%, Rio Tinto presents a compelling opportunity for investors looking to capitalize on the strength of the mining industry. Its diversified portfolio and strong financial position underpin its dividend sustainability.

>> Rio Tinto Dividend History

Energy Transfer

Despite an enticing dividend yield of 8.13%, Energy Transfer’s elevated payout ratio of 113.30% raises concerns about dividend sustainability. Investors should carefully evaluate its financial health and long-term prospects before considering an investment in this energy infrastructure company.

>> Energy Transfer Dividend History

Ashtead

Ashtead offers a modest dividend yield of 1.42% alongside a conservative payout ratio of 27.47%. Its focus on equipment rental services and strong market position provide a stable foundation for dividend growth and capital appreciation over time.

>> Ashtead Dividend History

Antofagasta

Antofagasta provides a dividend yield of 1.45% with a relatively high payout ratio of 74.02%. Investors should assess the company’s exposure to commodity price volatility and its ability to sustain dividend payments amid market fluctuations.

>> Antofagasta Dividend History

AstraZeneca

AstraZeneca offers a dividend yield of 2.19% and a payout ratio of 76.12%, reflecting its commitment to returning value to shareholders while maintaining financial flexibility for research and development initiatives. Its strong pipeline of pharmaceutical products supports its long-term dividend prospects.

>> AstraZeneca Dividend History

BAE Systems PLC

BAE Systems PLC presents a dividend yield of 2.19% and a reasonable payout ratio of 46.52%, making it an attractive pick for income-oriented investors seeking exposure to the defense industry. Its stable cash flows and strategic contracts support its dividend sustainability.

>> BAE Systems PLC Dividend History

Barclays

Barclays provides a dividend yield of 3.75% alongside a conservative payout ratio of 28.84%. Its diversified financial services offerings and focus on cost efficiency contribute to its ability to sustain dividend payments while navigating market challenges.

>> Barclays Dividend History

Croda International

Croda International offers a dividend yield of 2.20% with a relatively high payout ratio of 88.31%. Investors should assess the company’s specialty chemicals business and its ability to generate consistent cash flows to support dividend payments over the long term.

>> Croda International Dividend History

Halma Plc

With a dividend yield of 0.90% and a low payout ratio of 32.16%, Halma Plc showcases stability and prudent financial management. Its diversified portfolio across multiple sectors enhances its appeal to long-term investors seeking reliable income streams.

>> Halma Plc Dividend History

Endeavour Mining

Despite its enticing 4.26% dividend yield, investors should approach with caution due to the notably high payout ratio of 242.86%. Endeavour Mining’s ability to sustain dividend payments may be hindered by this elevated ratio, warranting careful monitoring of its financial health.

>> Endeavour Mining Dividend History

Fresnillo

Fresnillo offers a modest dividend yield of 0.99% with a conservative payout ratio of 46.76%. As a leading silver and gold mining company, Fresnillo’s stable operations and prudent financial management support its ability to maintain dividend payments over the long term.

>> Fresnillo Dividend History

Glencore

Glencore presents a dividend yield of 2.43% alongside a relatively high payout ratio of 131.12%. Investors should assess the company’s exposure to commodity price volatility and its ability to generate sustainable cash flows to support dividend distributions.

>> Glencore Dividend History

Are UK Dividend Growth Stocks a Good Investment?

Investing in UK dividend growth stocks can be a prudent strategy for long-term wealth accumulation. These stocks not only offer the potential for capital appreciation but also provide a steady stream of income through dividends. 

Additionally, companies with a history of consistent dividend growth often demonstrate financial stability and sound management practices, making them attractive investments for those seeking reliable returns over time.

Factors to Consider when Investing in UK Dividend Growth Stocks

When investing in UK dividend growth stocks, it’s crucial to assess the company’s financial health, dividend history, and payout ratio. Additionally, consider the industry trends, economic conditions, and regulatory environment. 

Diversification across sectors and diligent research can help mitigate risks and optimize returns in your dividend growth stock portfolio.