Top UK Dividend Stocks To Consider In August 2024

The UK market has faced challenges recently, with the FTSE 100 closing lower due to weak trade data from China, highlighting ongoing struggles in global economic recovery. Despite these headwinds, dividend stocks remain a popular choice for investors seeking steady income and potential stability amid market volatility. In this article, we will explore three top UK dividend stocks to consider in August 2024.

Top 10 Dividend Stocks In The United Kingdom

Name	Dividend Yield	Dividend Rating
James Latham (AIM:LTHM)	5.68%	★★★★★★
4imprint Group (LSE:FOUR)	3.15%	★★★★★☆
Impax Asset Management Group (AIM:IPX)	7.39%	★★★★★☆
Big Yellow Group (LSE:BYG)	3.77%	★★★★★☆
Dunelm Group (LSE:DNLM)	6.62%	★★★★★☆
Man Group (LSE:EMG)	5.94%	★★★★★☆
DCC (LSE:DCC)	3.83%	★★★★★☆
NWF Group (AIM:NWF)	4.76%	★★★★★☆
Pets at Home Group (LSE:PETS)	4.42%	★★★★★☆
Grafton Group (LSE:GFTU)	3.58%	★★★★★☆

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

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

City of London Investment Group (LSE:CLIG)

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

Overview: City of London Investment Group PLC is a publicly owned investment manager with a market cap of £184.80 million.

Operations: City of London Investment Group PLC generates $73.72 million in revenue from its asset management segment.

Dividend Yield: 8.4%

City of London Investment Group offers a high dividend yield of 8.45%, placing it in the top 25% of UK dividend payers. However, its dividend payments have been volatile and are not well covered by earnings, with a payout ratio of 112.5%. The dividends are covered by free cash flow at an 89.6% cash payout ratio, but sustainability remains a concern given the inconsistency and high payout ratios relative to earnings growth.

• Click here to discover the nuances of City of London Investment Group with our detailed analytical dividend report.
• The valuation report we've compiled suggests that City of London Investment Group's current price could be quite moderate.

Morgan Sindall Group (LSE:MGNS)

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

Overview: Morgan Sindall Group plc, with a market cap of £1.37 billion, operates as a construction and regeneration company in the United Kingdom.

Operations: Morgan Sindall Group plc's revenue segments include Fit Out (£1.24 billion), Construction (£1.02 billion), Infrastructure (£989.20 million), Property Services (£191.80 million), Urban Regeneration (£148.40 million), and Partnership Housing (£845.20 million).

Dividend Yield: 3.9%

Morgan Sindall Group's dividend payments have been volatile over the past decade but have shown growth. The company trades at 38.9% below its estimated fair value and reported a significant earnings increase of 93.1% year-on-year. Its dividends are well covered by both earnings (payout ratio: 44.7%) and cash flows (cash payout ratio: 31.8%). Recently, Morgan Sindall announced a 15% increase in its interim dividend to GBP 0.415 per share, reflecting improved financial performance for H1 2024 with net income rising to GBP 52.6 million from GBP 46.3 million a year ago.

• Click here and access our complete dividend analysis report to understand the dynamics of Morgan Sindall Group.
• Our valuation report here indicates Morgan Sindall Group may be undervalued.

Paragon Banking Group (LSE:PAG)

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

Overview: Paragon Banking Group PLC, with a market cap of £1.58 billion, offers financial products and services in the United Kingdom.

Operations: Paragon Banking Group PLC generates revenue from two primary segments: Mortgage Lending (£281.30 million) and Commercial Lending (£133.70 million).

Dividend Yield: 5.2%

Paragon Banking Group's dividend payments have been volatile over the past decade but have shown growth. The company trades at 57.2% below its estimated fair value and reported a significant earnings increase for H1 2024, with net income rising to £81.9 million from £37.9 million a year ago. Its dividends are well covered by both earnings (payout ratio: 43%) and cash flows (cash payout ratio: 3.3%). Recently, Paragon announced a share buyback program worth up to £50 million.

• Take a closer look at Paragon Banking Group's potential here in our dividend report.
• Our expertly prepared valuation report Paragon Banking Group implies its share price may be lower than expected.

Key Takeaways

• Unlock more gems! Our Top UK Dividend Stocks screener has unearthed 54 more companies for you to explore.Click here to unveil our expertly curated list of 57 Top UK Dividend Stocks.
• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

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.

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