Top U.K. (FTSE) Capital Goods Dividend Stocks

Top U.K. (FTSE) Capital Goods Dividend Stocks

UPDATED Nov 24, 2022

What are the best U.K. (FTSE) Capital Goods Dividend Stocks?

According to our Simply Wall St analysis these are the best U.K. Capital Goods dividend companies. We look for companies with high quality dividends and healthy balance sheets to find the top Dividend Stocks.

Our criteria to find Top Dividend Companies

High Yield

  • Companies with a high dividend yield are more attractive due to the higher expected income for each dollar invested.
  • Yields vary between markets, so we focus on the top dividend payers in each market.

What do we look for?

  • Is the yield in the top 25% of the market's dividend payers.

Consistent Dividends

  • Companies with a strong track record of paying a consistent and growing dividend are the most attractive.
  • If the dividend has been cut substantially in the past, then it's difficult to be confident about future payments.

What do we look for?

  • Has the dividend been stable over the last 10 years.
  • Has the dividend grown over the last 10 years.

Dividend Cover

  • Ideally the company doesn't pay out all of its earnings, neglecting future growth.
  • If a company is unable to afford its dividend, then it will probably lead to a dividend cut and share price erosion.

What do we look for?

  • Are dividends covered by earnings.
  • Are dividends forecast to be covered by earnings in the future.

Healthy Balance Sheet

  • Investors want to make sure the company is positioned to cover its debts. Repayments on debt typically take priority over shareholder return initiatives.

What do we look for?

  • Does the company have a manageable level of debt.
  • Is the company able to cover its interest repayments.

5 companies meet this criteria in the U.K. market

BAE Systems plc provides defense, aerospace, and security solutions worldwide.

Dividend Criteria

  • Stable Dividend

  • Earnings Coverage

  • Growing Dividend

  • Future Dividend Coverage

  • Notable Dividend

  • High Dividend: BA.'s dividend (3.21%) is low compared to the top 25% of dividend payers in the UK market (5.67%).

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Rewards

  • Trading at 8.2% below our estimate of its fair value

  • Earnings are forecast to grow 5.52% per year

Risks

No risks detected for BA. from our risks checks.

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Trifast plc, together with its subsidiaries, engages in the design, engineering, manufacture, and distribution of industrial fasteners and category C components in the United Kingdom, Europe, North America, and Asia.

Dividend Criteria

  • Earnings Coverage

  • Growing Dividend

  • Future Dividend Coverage

  • High Dividend: TRI's dividend (5.7%) is in the top 25% of dividend payers in the UK market (5.7%)

  • Notable Dividend

  • Stable Dividend

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Rewards

  • Trading at 57.8% below our estimate of its fair value

  • Earnings are forecast to grow 29.34% per year

Risks

  • Does not have a meaningful market cap (£66M)

  • Large one-off items impacting financial results

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Bodycote plc provides heat treatment and thermal processing services worldwide.

Dividend Criteria

  • Earnings Coverage

  • Growing Dividend

  • Future Dividend Coverage

  • Notable Dividend

  • High Dividend: BOY's dividend (3.36%) is low compared to the top 25% of dividend payers in the UK market (5.7%).

  • Stable Dividend

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Rewards

  • Trading at 39.9% below our estimate of its fair value

  • Earnings are forecast to grow 10.56% per year

  • Earnings grew by 77.9% over the past year

Risks

No risks detected for BOY from our risks checks.

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RS Group plc, together with its subsidiaries, distributes various electronics and industrial products in the United Kingdom, the United States, France, Germany, Italy, and internationally.

Dividend Criteria

  • Stable Dividend

  • Earnings Coverage

  • Growing Dividend

  • Future Dividend Coverage

  • Notable Dividend

  • High Dividend: RS1's dividend (1.88%) is low compared to the top 25% of dividend payers in the UK market (5.7%).

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Rewards

  • Trading at 14.2% below our estimate of its fair value

  • Earnings are forecast to grow 5.48% per year

  • Earnings grew by 46.6% over the past year

Risks

No risks detected for RS1 from our risks checks.

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Ashtead Group plc, together with its subsidiaries, engages in the construction, industrial, and general equipment rental business in the United States, the United Kingdom, and Canada.

Dividend Criteria

  • Stable Dividend

  • Earnings Coverage

  • Growing Dividend

  • Future Dividend Coverage

  • Notable Dividend

  • High Dividend: AHT's dividend (1.31%) is low compared to the top 25% of dividend payers in the UK market (5.7%).

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Rewards

  • Trading at 23.1% below our estimate of its fair value

  • Earnings are forecast to grow 5.44% per year

  • Earnings have grown 0.9% per year over the past 5 years

Risks

  • Has a high level of debt

View all Risks and Rewards
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