3 UK Dividend Stocks Offering Yields Up To 5.2%

Amidst recent challenges in the UK market, particularly with the FTSE 100 facing pressure from weak trade data out of China, investors are increasingly looking towards dividend stocks as a potential source of stability and income. In such an environment, selecting stocks that offer reliable dividends can be a prudent strategy for those seeking to navigate market volatility while benefiting from steady cash flows.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 58 stocks from our Top UK Dividend Stocks screener.

We'll examine a selection from our screener results.

Arbuthnot Banking Group (AIM:ARBB)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Arbuthnot Banking Group PLC, along with its subsidiaries, offers private and commercial banking products and services in the United Kingdom, with a market cap of £152.38 million.

Operations: Arbuthnot Banking Group PLC generates revenue through several segments, including Wealth Management (£13.67 million), Asset Alliance Group (£15.34 million), Renaissance Asset Finance (£12.56 million), Banking excluding Wealth Management (£95.64 million), and Arbuthnot Commercial Asset Based Lending (£19.93 million).

Dividend Yield: 5.2%

Arbuthnot Banking Group has increased its dividend to 69 pence per share for 2024, up from 46 pence in 2023. Despite a decline in net income to £24.85 million from £35.38 million, the company's payout ratio remains low at 32.2%, indicating dividends are well covered by earnings. However, its dividend history is marked by volatility and unreliability over the past decade, and it trades below estimated fair value with a high level of bad loans at 3.4%.

• Click to explore a detailed breakdown of our findings in Arbuthnot Banking Group's dividend report.
• In light of our recent valuation report, it seems possible that Arbuthnot Banking Group is trading behind its estimated value.

Grafton Group (LSE:GFTU)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Grafton Group plc is a distributor and seller of building materials and construction-related products operating in Ireland, the United Kingdom, the Netherlands, Finland, and Spain with a market cap of £1.97 billion.

Operations: Grafton Group's revenue is primarily derived from its UK Distribution segment (£780.78 million), Ireland Distribution (£632.81 million), Netherlands Distribution (£337.58 million), Retailing (£261.06 million), Finland Distribution (£131.76 million), Manufacturing (£122.16 million), and Spain Distribution (£29.66 million).

Dividend Yield: 3.7%

Grafton Group's recent approval of a 26.5 pence final dividend highlights its commitment to rewarding shareholders, supported by a reasonable payout ratio of 60.8% and strong cash flow coverage at 36%. The company's revenue growth, up to £773.1 million for early 2025, underscores operational strength contributing to sustainable dividends. While the dividend yield of 3.66% is below top-tier UK payers, it remains reliable and stable over the past decade, trading at a discount to estimated fair value.

• Navigate through the intricacies of Grafton Group with our comprehensive dividend report here.
• According our valuation report, there's an indication that Grafton Group's share price might be on the cheaper side.

RS Group (LSE:RS1)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: RS Group plc, with a market cap of £2.70 billion, is involved in the distribution of maintenance, repair, and operations products and service solutions across various countries including the United Kingdom, the United States, France, Germany, Italy, Mexico and internationally.

Operations: RS Group plc generates revenue from its Own-Brand Products (£400.40 million) and Other Product and Service Solutions (£2.50 billion).

Dividend Yield: 3.9%

RS Group's dividend yield of 3.94% is lower than top-tier UK payers but remains reliable and stable over the past decade, supported by a sustainable payout ratio of 69% and cash flow coverage at 50.6%. The company recently increased its dividend by 2%, reflecting steady growth. Despite a slight decline in sales to £2.90 billion, RS trades below its estimated fair value and maintains strong earnings forecasts, bolstered by strategic alliances in automation sectors.

• Take a closer look at RS Group's potential here in our dividend report.
• The valuation report we've compiled suggests that RS Group's current price could be quite moderate.

Where To Now?

• Explore the 58 names from our Top UK Dividend Stocks screener here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Seeking Other Investments?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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