Categories: Market News

FTSE 100: Best Dividend Stocks in the UK

High yielding dividend stocks are attractive to many investors. If they can pick some of the best investment shares for dividends UK, they could receive not only potential growth in the share price, but also regular income payments in the form of dividends.

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Companies paying dividends are usually well-established and have stable earnings. Here in this article, we look at the top five dividend stocks in the FTSE.

Best dividend stocks list

Vodafone Group – Dividend Yield 11.53%
Phoenix Group Holdings – Dividend Yield 10.50%
British American Tobacco – Dividend Yield 10.06%
M&G – Dividend Yield 9.18%
Imperial Brands – Dividend Yield 8.19%

*Dividend yields were taken at the time of writing (12 December 2023) but will change over time.

1. Vodafone

Vodafone is a telecommunications company operating services in Europe, Asia, Africa and Oceania. At the time of writing, Vodafone had an annual dividend yield of 11.53% – one of the highest in the FTSE 100 index.

2. Phoenix Group Holdings

The company was founded in 1857 as The Pearl Loan Company and renamed itself Phoenix Group Holdings in 2010. It offers a range of pensions and savings products to support people across all stages of the savings life cycle.

3. British American Tobacco

It is not surprising that a tobacco company is at the top of the list, as tobacco companies are high-cash businesses and tend to pay out high dividends. Not to mention big tobacco companies like British American Tobacco. It is the world’s largest tobacco company based on net sales.

4. M&G

M&G is a global investment manager that provides savings and investment products with more than five million customers.

5. Imperial Brands

Imperial Brands is the fourth-largest international cigarette company. While the demand for smoking tobacco among millennials in the Western world is decreasing, Imperial Brands does have several popular vaping brands.

How to invest in top dividend stocks

You can open a real trading account to start investing in dividend stocks through CFDs with Fortrade. Or, you can also create a demo account to do practice trading. Fortrade is a brokerage for stocks and forex regulated by the UK Financial Conduct Authority (FCA).

Final words

Large dividends may be unsustainable. It is always important to look beyond the yield. The dividend payout ratio (DPR) is a useful ratio to measure how sustainable a company’s dividend payments are. Investors calculate the ratio by dividing total dividends by net income.

Typically, a company with a DPR less than 50% is considered stable and more likely to pay sustainable dividends. If a company’s DPR exceeds 100% or is negative (meaning that the company has a net loss), dividends are at a higher risk of being cut.