Top UK Dividend Stocks To Consider In March 2025

As the UK market grapples with challenges stemming from weak trade data from China, the FTSE 100 and FTSE 250 indices have experienced declines, reflecting broader concerns about global economic recovery. In this environment, dividend stocks can offer a compelling opportunity for investors seeking stability and income, as they often provide consistent returns even amidst market volatility.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 61 stocks from our Top UK Dividend Stocks screener.

Let's take a closer look at a couple of our picks from the screened companies.

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 £41.98 billion.

Operations: Lloyds Banking Group's revenue is primarily derived from its Retail segment, including Wealth (£10.86 billion), followed by Commercial Banking excluding Credit Cards (£5.27 billion), and Insurance, Pensions, and Investments (£1.16 billion).

Dividend Yield: 4.6%

Lloyds Banking Group's dividend yield is lower than the UK market's top payers, with a current payout ratio of 50.4% suggesting dividends are covered by earnings. Despite past volatility, recent increases align with their sustainable policy. The company announced a £1.70 billion share buyback and a £750 million fixed-income offering, reflecting strategic capital management efforts amid evolving digital initiatives led by new leadership appointments from tech giants like Amazon.

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

Morgan Sindall Group (LSE:MGNS)

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

Overview: Morgan Sindall Group plc is a UK-based construction and regeneration company with a market cap of approximately £1.40 billion.

Operations: Morgan Sindall Group plc's revenue segments include Fit Out (£1.30 billion), Construction (£1.04 billion), Infrastructure (£1.05 billion), Property Services (£223.20 million), Urban Regeneration (£90.50 million), and Partnership Housing (£861.20 million).

Dividend Yield: 4.4%

Morgan Sindall Group offers a dividend yield lower than top UK payers, with dividends well-covered by earnings and cash flows. Despite past volatility, recent increases show growth, with a 15% rise to 131.5p per share for the year. The company trades at a favorable P/E ratio of 10.7x compared to the market average of 15x and reported increased sales and net income for 2024, indicating strong financial health amid economic uncertainty.

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

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 key segments, including £280.50 million from Mortgage Lending and £115.20 million from Commercial Lending.

Dividend Yield: 5.5%

Paragon Banking Group's dividends are well-supported by earnings and cash flows, with a payout ratio of 45.6% and a cash payout ratio of 3.6%. Despite historical volatility, dividend growth is evident over the past decade, recently approving a final dividend of £0.272 per share at its AGM on March 5, 2025. The stock trades at an attractive valuation, significantly below its estimated fair value but has experienced significant insider selling recently.

• Unlock comprehensive insights into our analysis of Paragon Banking Group stock in this dividend report.
• Our comprehensive valuation report raises the possibility that Paragon Banking Group is priced lower than what may be justified by its financials.

Seize The Opportunity

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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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