3 UK Dividend Stocks To Enhance Your Portfolio

The United Kingdom's FTSE 100 index has recently faced challenges, closing lower amid weak trade data from China, which has impacted companies closely tied to the Chinese market. As global economic uncertainties persist, investors may find value in dividend stocks that offer consistent income and potential stability in a fluctuating market. Focusing on reliable dividend payers can be an effective strategy to enhance a portfolio during such unpredictable times.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 60 stocks from our Top UK Dividend Stocks screener.

We'll examine a selection from our screener results.

Brooks Macdonald Group (AIM:BRK)

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

Overview: Brooks Macdonald Group plc offers investment and wealth management services to private clients, pension funds, professional intermediaries, and trustees in the UK and Channel Islands, with a market cap of £236.01 million.

Operations: Brooks Macdonald Group plc generates revenue by providing a variety of financial services, including investment and wealth management, to clients such as private individuals, pension funds, professional intermediaries, and trustees across the UK and Channel Islands.

Dividend Yield: 5.3%

Brooks Macdonald Group's dividend payments are stable and reliable, having grown consistently over the past decade. However, the dividend yield of 5.31% is below the top tier in the UK market and not well covered by earnings with a high payout ratio of 187.5%. Recent financials show improved net income at £9.6 million for H1 2025, contrasting with a loss last year, alongside strategic acquisitions to enhance its domestic focus after divesting its international arm.

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

James Latham (AIM:LTHM)

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

Overview: James Latham plc, with a market cap of £206.60 million, imports and distributes timbers, panels, and decorative surfaces across the United Kingdom, the Republic of Ireland, Europe, and internationally.

Operations: James Latham plc generates revenue of £362.22 million from its timber importing and distribution segment.

Dividend Yield: 7.6%

James Latham's dividend yield of 7.63% ranks in the top 25% of UK payers, with stable and growing payments over the past decade. Despite a low payout ratio of 33.4%, dividends are not well covered by free cash flow, indicated by a high cash payout ratio of 107%. Trading at a discount to its estimated fair value, future earnings are expected to decline slightly, which could impact dividend sustainability.

• Unlock comprehensive insights into our analysis of James Latham stock in this dividend report.
• According our valuation report, there's an indication that James Latham's share price might be on the cheaper side.

Foresight Group Holdings (LSE:FSG)

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

Overview: Foresight Group Holdings Limited is an infrastructure and private equity manager operating in the United Kingdom, Italy, Luxembourg, Ireland, Spain, and Australia with a market cap of £425.40 million.

Operations: Foresight Group Holdings Limited generates revenue through its infrastructure segment (£87.79 million), private equity segment (£50.78 million), and Foresight Capital Management (£8.10 million).

Dividend Yield: 6.1%

Foresight Group Holdings offers a dividend yield of 6.12%, ranking in the top 25% of UK dividend payers. While dividends have been stable and growing, they've only been paid for four years. The payout ratio of 86.6% suggests dividends are covered by earnings, and cash flow coverage is reasonable at 68.3%. Recent developments include a £2 million increase in its buyback plan and new responsibilities as sub-investment manager for Liontrust's fund, potentially enhancing future capabilities.

• Get an in-depth perspective on Foresight Group Holdings' performance by reading our dividend report here.
• Insights from our recent valuation report point to the potential undervaluation of Foresight Group Holdings shares in the market.

Key Takeaways

• Reveal the 60 hidden gems among our Top UK Dividend Stocks screener with a single click here.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Want To Explore Some Alternatives?

• 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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