Stock Analysis

3 UK Dividend Stocks Offering Up To 4.2% Yield

AIM:BEG
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In the current landscape, the UK market has been experiencing some turbulence, with the FTSE 100 index recently closing lower due to weak trade data from China impacting investor sentiment. Amid these challenges, dividend stocks can offer a measure of stability and income potential for investors seeking reliable returns in uncertain times.

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Top 10 Dividend Stocks In The United Kingdom

NameDividend YieldDividend Rating
WPP (LSE:WPP)9.57%★★★★★★
Treatt (LSE:TET)3.43%★★★★★☆
Pets at Home Group (LSE:PETS)5.51%★★★★★☆
OSB Group (LSE:OSB)5.97%★★★★★☆
NWF Group (AIM:NWF)4.76%★★★★★☆
Man Group (LSE:EMG)7.17%★★★★★☆
Keller Group (LSE:KLR)3.58%★★★★★☆
Grafton Group (LSE:GFTU)4.13%★★★★★☆
Dunelm Group (LSE:DNLM)6.92%★★★★★☆
4imprint Group (LSE:FOUR)4.95%★★★★★☆

Click here to see the full list of 57 stocks from our Top UK Dividend Stocks screener.

We'll examine a selection from our screener results.

Begbies Traynor Group (AIM:BEG)

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

Overview: Begbies Traynor Group plc offers professional services to businesses, advisors, corporations, and financial institutions in the UK, with a market cap of £196.23 million.

Operations: Begbies Traynor Group plc generates revenue through its Property Advisory segment, which contributes £46.40 million, and its Business Recovery and Advisory segment, which accounts for £107.30 million.

Dividend Yield: 3.5%

Begbies Traynor Group's dividend yield of 3.5% is below the UK market's top quartile, and its high payout ratio of 108.5% indicates dividends are not well covered by earnings, though cash flow coverage is reasonable at 51.2%. The company has a stable and growing dividend history over ten years, with a recent increase to 4.3 pence per share for 2025. Recent buybacks and improved earnings suggest positive financial momentum despite sustainability concerns in dividend coverage from profits alone.

AIM:BEG Dividend History as at Jul 2025
AIM:BEG Dividend History as at Jul 2025

Associated British Foods (LSE:ABF)

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

Overview: Associated British Foods plc is a diversified company engaged in food production, ingredients, and retail operations globally, with a market cap of approximately £15.07 billion.

Operations: Associated British Foods plc generates revenue from several segments, including Retail (£9.42 billion), Grocery (£4.21 billion), Sugar (£2.46 billion), Ingredients (£2.11 billion), and Agriculture (£1.62 billion).

Dividend Yield: 4.3%

Associated British Foods offers a dividend yield of 4.26%, which is below the UK's top tier, but its dividends are well-covered by earnings and cash flows with payout ratios of 35.4% and 50.1%, respectively. Despite a history of volatility, recent affirmations suggest stability with an interim dividend set for July 2025. The company is exploring strategic options amid challenging conditions for Allied Bakeries, potentially impacting future financials and dividend sustainability.

LSE:ABF Dividend History as at Jul 2025
LSE:ABF Dividend History as at Jul 2025

Lloyds Banking Group (LSE:LLOY)

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

Overview: Lloyds Banking Group plc, along with its subsidiaries, offers a variety of banking and financial products and services both in the United Kingdom and internationally, with a market cap of £45.39 billion.

Operations: Lloyds Banking Group's revenue segments encompass a diverse array of banking and financial services provided both domestically in the UK and on an international scale.

Dividend Yield: 4.1%

Lloyds Banking Group's dividend yield of 4.15% is modest compared to the UK's top quartile, yet its dividends are covered by earnings with a current payout ratio of 50.6%. Despite a volatile dividend history, future payouts are expected to remain sustainable at a forecasted 38.5% payout ratio in three years. Recent M&A discussions to acquire Curve UK Limited for up to £120 million could influence strategic growth and impact dividend stability moving forward.

LSE:LLOY Dividend History as at Jul 2025
LSE:LLOY Dividend History as at Jul 2025

Where To Now?

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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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About AIM:BEG

Begbies Traynor Group

Provides professional services to businesses, professional advisors, large corporations, and financial institutions in the United Kingdom.

Flawless balance sheet with solid track record and pays a dividend.

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