Top UK Dividend Stocks To Watch In January 2025

As the FTSE 100 faces challenges due to weak trade data from China, investors in the UK market are navigating a landscape marked by global economic uncertainties and fluctuating commodity prices. In such an environment, dividend stocks can offer a measure of stability and income potential, making them an attractive option for those seeking to weather market volatility while benefiting from regular payouts.

Top 10 Dividend Stocks In The United Kingdom

Name	Dividend Yield	Dividend Rating
Pets at Home Group (LSE:PETS)	6.22%	★★★★★★
Keller Group (LSE:KLR)	3.50%	★★★★★☆
4imprint Group (LSE:FOUR)	3.29%	★★★★★☆
OSB Group (LSE:OSB)	8.38%	★★★★★☆
Dunelm Group (LSE:DNLM)	7.62%	★★★★★☆
Man Group (LSE:EMG)	6.18%	★★★★★☆
Big Yellow Group (LSE:BYG)	4.98%	★★★★★☆
Grafton Group (LSE:GFTU)	4.03%	★★★★★☆
DCC (LSE:DCC)	3.84%	★★★★★☆
James Latham (AIM:LTHM)	6.75%	★★★★★☆

Click here to see the full list of 63 stocks from our Top UK Dividend Stocks screener.

Here we highlight a subset of our preferred stocks from the screener.

Paragon Banking Group (LSE:PAG)

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

Overview: Paragon Banking Group PLC offers financial products and services in the United Kingdom with a market cap of £1.46 billion.

Operations: Paragon Banking Group PLC generates revenue through its Mortgage Lending segment, which accounts for £280.50 million, and its Commercial Lending segment, contributing £115.20 million.

Dividend Yield: 5.6%

Paragon Banking Group has proposed a final dividend increase to 27.2 pence per share, bringing the total annual dividend to 40.4 pence, reflecting growth from the previous year. Despite past volatility in dividends, current payouts are well covered by earnings and cash flows with payout ratios of 45.6% and 3.7%, respectively. Recent earnings show significant improvement with net income rising to £186 million from £153.9 million last year, supporting its dividend sustainability efforts amidst an ongoing share buyback program totaling £42.5 million.

• Get an in-depth perspective on Paragon Banking Group's performance by reading our dividend report here.
• The valuation report we've compiled suggests that Paragon Banking Group's current price could be quite moderate.

Plus500 (LSE:PLUS)

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

Overview: Plus500 Ltd. is a fintech company that operates technology-based trading platforms across Europe, the United Kingdom, Australia, and internationally, with a market cap of £2.03 billion.

Operations: The company's revenue primarily comes from CFD Trading, which generated $750.80 million.

Dividend Yield: 5.8%

Plus500's dividend payments are well-covered by earnings and cash flows, with payout ratios of 24.9% and 36.7%, respectively, indicating sustainability. However, its dividend yield of 5.8% is slightly below the top quartile in the UK market. While dividends have grown over the past decade, they have been volatile and unreliable at times. Currently trading at a significant discount to its estimated fair value, Plus500 shows good relative value compared to peers in the industry.

• Dive into the specifics of Plus500 here with our thorough dividend report.
• Our comprehensive valuation report raises the possibility that Plus500 is priced lower than what may be justified by its financials.

TBC Bank Group (LSE:TBCG)

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

Overview: TBC Bank Group PLC operates in Georgia, Azerbaijan, and Uzbekistan offering a range of financial services including banking, leasing, insurance, brokerage, and card processing with a market cap of £1.73 billion.

Operations: TBC Bank Group PLC's revenue segments include banking, leasing, insurance, brokerage, and card processing services provided to both corporate and individual clients across Georgia, Azerbaijan, and Uzbekistan.

Dividend Yield: 6.4%

TBC Bank Group offers a strong dividend yield of 6.35%, placing it in the top 25% of UK dividend payers, with dividends well-covered by earnings at a payout ratio of 31.6%. Despite having paid dividends for only eight years, payments have been stable and growing. Recent earnings growth reinforces this coverage, though past shareholder dilution and high bad loan levels (2.1%) warrant caution. The stock trades significantly below its estimated fair value, suggesting potential undervaluation.

• Delve into the full analysis dividend report here for a deeper understanding of TBC Bank Group.
• According our valuation report, there's an indication that TBC Bank Group's share price might be on the cheaper side.

Make It Happen

• Click here to access our complete index of 63 Top UK Dividend Stocks.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Searching for a Fresh Perspective?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com