bankkgraphy
This is hardly breaking news, but as we head into 2024, the UK stock market remains one of the most attractive markets for dividend investors on the planet.
For example, the 40 UK stocks with the best combination of forecast dividend yield and market cap (listed below) have an average forecast dividend yield of 6.1% and the average yield across the top ten stocks is 8.0%.
Three of the top 40 stocks have dividend yields above 10%, and if that seems a little too risky for your tastes, you’ll be glad to know that 26 of those 40 stocks have a more conservative but still very attractive yield of more than 5%.
As has long been the case, these high-yield stocks mostly operate in a handful of sectors that are, to put it mildly, unlikely to impress anyone around a dinner table. This shows up most clearly at the top of the list, where the top 17 stocks come from just four areas of the economy: financials, utilities, tobacco and commodities (oil, gas & mining).
Financial stocks like banks, insurers and asset managers have been out of favour for years, perhaps because the global financial crisis left the public with a lasting sense of distaste and distrust towards any company even loosely related to bankers. As for utilities, most people think they’re as dull as dishwater and tobacco, oil, gas and mining stocks are about as un-ESG (and therefore as un-popular) as you can get.
However, if you can stomach the social stigma that comes with investing in “boring” utilities or “evil” banks, tobacco, mining and fossil fuel companies, then the forecast yields on offer are, in some cases, truly exceptional.
Of course, dividends are never guaranteed, but even so, this list is still an excellent place to start and ten of these companies are good enough to have made it into the UK Dividend Stocks Portfolio.
Top 40 high-yield blue-chip UK stocks: 2024 Q1
If you’re reading this after Q1 2024, then you can see the most recent list on the Top 40 UK Dividend Stocks page. Otherwise, here’s the list for January 2024:
| No. | Company (Links to Review) | Symbol | Index | Sector | Share Price | Forecast Yield (%) |
|---|---|---|---|---|---|---|
| 1 | British American Tobacco p.l.c. (BTI) | BATS | FTSE 100 | Tobacco | £23.60 | 10.1 |
| 2 | HSBC Holdings plc (HSBC) | HSBA | FTSE 100 | Banks | £6.34 | 8.0 |
| 3 | Vodafone Group PLC (VOD) | VOD | FTSE 100 | Telecommunications Service Providers | £0.70 | 10.9 |
| 4 | Glencore plc (OTCPK:GLCNF) | GLEN | FTSE 100 | Industrial Metals and Mining | £4.63 | 7.2 |
| 5 | Imperial Brands PLC (OTCQX:IMBBY) | IMB | FTSE 100 | Tobacco | £18.55 | 8.3 |
| 6 | Rio Tinto (RIO) | RIO | FTSE 100 | Industrial Metals and Mining | £57.00 | 5.8 |
| 7 | Legal & General Group Plc (OTCPK:LGGNY) | LGEN | FTSE 100 | Life Insurance | £2.44 | 8.3 |
| 8 | NatWest Group plc (NWG) | NWG | FTSE 100 | Banks | £2.21 | 7.6 |
| 9 | Aviva plc (OTCPK:AIVAF) | AV. | FTSE 100 | Life Insurance | £4.33 | 7.7 |
| 10 | Lloyds Banking Group plc (LYG) | LLOY | FTSE 100 | Banks | £0.47 | 5.9 |
| 11 | National Grid plc (NGG) | NG. | FTSE 100 | Gas, Water and Multi-utilities | £10.75 | 5.4 |
| 12 | Barclays PLC (BCS) | BARC | FTSE 100 | Banks | £1.56 | 5.5 |
| 13 | BT Group plc (OTCPK:BTGOF) | BT.A | FTSE 100 | Telecommunications Service Providers | £1.21 | 6.4 |
| 14 | Phoenix Group Holdings (OTCPK:PNXGF) | PHNX | FTSE 100 | Life Insurance | £5.19 | 10.2 |
| 15 | M&G plc (OTCPK:MGPUF) | MNG | FTSE 100 | Investment Banking and Brokerage Services | £2.25 | 9.0 |
| 16 | BP p.l.c. (BP) | BP. | FTSE 100 | Oil, Gas and Coal | £4.74 | 4.7 |
| 17 | Shell plc (SHEL) | SHEL | FTSE 100 | Oil, Gas and Coal | £25.71 | 3.9 |
| 18 | Unilever PLC (UL) | ULVR | FTSE 100 | Personal Care, Drug and Grocery Stores | £38.29 | 3.9 |
| 19 | WPP plc (WPP) | WPP | FTSE 100 | Media | £7.70 | 5.0 |
| 20 | Taylor Wimpey plc (OTCPK:TWODF) | TW. | FTSE 100 | Household Goods and Home Construction | £1.44 | 6.5 |
| 21 | Anglo American plc (OTCQX:AAUKF) | AAL | FTSE 100 | Industrial Metals and Mining | £18.71 | 4.2 |
| 22 | abrdn plc (OTCPK:SLFPF) | ABDN | FTSE 250 | Investment Banking and Brokerage Services | £1.71 | 8.5 |
| 23 | St. James’s Place plc (OTCPK:STJPF) | STJ | FTSE 100 | Investment Banking and Brokerage Services | £6.43 | 8.0 |
| 24 | GSK plc (GSK) | GSK | FTSE 100 | Pharmaceuticals, Biotechnology and Marijuana Producers | £15.41 | 3.7 |
| 25 | Schroders plc (OTCPK:SHNWF) | SDR | FTSE 100 | Investment Banking and Brokerage Services | £4.25 | 5.1 |
| 26 | United Utilities Group PLC (OTCPK:UUGRY) | UU. | FTSE 100 | Gas, Water and Multi-utilities | £10.58 | 4.7 |
| 27 | Severn Trent PLC (OTCPK:SVTRF) | SVT | FTSE 100 | Gas, Water and Multi-utilities | £25.73 | 4.5 |
| 28 | DS Smith Plc (OTCPK:DITHF) | SMDS | FTSE 100 | General Industrials | £3.00 | 6.0 |
| 29 | Reckitt Benckiser Group plc (OTCPK:RBGPF) | RKT | FTSE 100 | Personal Care, Drug and Grocery Stores | £55.12 | 3.5 |
| 30 | Investec (OTCPK:IVTJF) | INVP | FTSE 250 | Banks | £5.24 | 6.7 |
| 31 | Tesco PLC (OTCPK:TSCDF) | TSCO | FTSE 100 | Personal Care, Drug and Grocery Stores | £3.01 | 3.8 |
| 32 | Smurfit Kappa Group Plc (OTCPK:SMFTF) | SKG | FTSE 100 | General Industrials | £30.44 | 4.3 |
| 33 | ITV plc (OTCPK:ITVPF) | ITV | FTSE 250 | Media | £0.63 | 8.0 |
| 34 | Hargreaves Lansdown plc (OTCPK:HRGLF) | HL. | FTSE 250 | Investment Banking and Brokerage Services | £7.22 | 6.3 |
| 35 | Kingfisher plc (OTCQX:KGFHF) | KGF | FTSE 100 | Retailers | £2.29 | 5.4 |
| 36 | Intermediate Capital Group plc (OTCPK:ICGUF) | ICP | FTSE 100 | Investment Banking and Brokerage Services | £15.91 | 5.0 |
| 37 | J Sainsbury plc (OTCQX:JSNSF) | SBRY | FTSE 100 | Personal Care, Drug and Grocery Stores | £3.09 | 4.2 |
| 38 | Admiral Group plc (OTCPK:AMIGF) | ADM | FTSE 100 | Non-life Insurance | £26.88 | 4.0 |
| 39 | Diageo plc (DEO) | DGE | FTSE 100 | Beverages | £27.65 | 2.9 |
| 40 | IG Group Holdings plc (OTCPK:IGGHY) | IGG | FTSE 250 | Investment Banking and Brokerage Services | £7.52 | 6.1 |
How is this list constructed?
The data comes from SharePad and the list is created using the following steps:
- Start with all stocks in the FTSE 350
- Remove any stocks where the dividend yield or forecast yield is zero yield (i.e. no dividend paid last year or expected next year)
- Give each remaining stock a “size rank” based on market cap (the largest company has a size rank of 1)
- Give each stock a “yield rank” based on the forecast yield (the highest-yielding stock has a yield rank of 1)
- Calculate an overall rank by adding the size rank and yield rank together
- Sort the list by the overall rank so the stock with the best combination of large size and high yield is at the top of the list, followed by the next best and so on
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
