Top 3 UK Dividend Stocks To Consider For Your Portfolio

As the FTSE 100 and FTSE 250 indices reflect the challenges posed by weak trade data from China, investors in the United Kingdom are navigating a complex market landscape. In such uncertain times, dividend stocks can offer a measure of stability and income potential, making them an appealing choice for those looking to bolster their portfolios amidst fluctuating economic conditions.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 54 stocks from our Top UK Dividend Stocks screener.

We're going to check out a few of the best picks from our screener tool.

Johnson Service Group (AIM:JSG)

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

Overview: Johnson Service Group PLC, with a market cap of £551.06 million, offers textile rental and related services across the United Kingdom and Ireland.

Operations: Johnson Service Group PLC generates revenue from two main segments: HORECA, contributing £371.20 million, and Workwear, contributing £142.20 million.

Dividend Yield: 3%

Johnson Service Group's dividend payments are well-covered by earnings and cash flows, with a payout ratio of 46.7% and a cash payout ratio of 59.1%. However, its dividend yield is relatively low at 3%, compared to the top UK payers. Despite a volatile dividend history, recent earnings growth of £35.6 million and strategic share buybacks worth £30 million may enhance shareholder value. Leadership changes include Ryan Govender as incoming CFO in October 2025, succeeding Yvonne Monaghan after her extensive tenure.

• Unlock comprehensive insights into our analysis of Johnson Service Group stock in this dividend report.
• The valuation report we've compiled suggests that Johnson Service Group's current price could be quite moderate.

Grafton Group (LSE:GFTU)

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

Overview: Grafton Group plc is a company that distributes and sells building materials and construction-related products across Ireland, the United Kingdom, the Netherlands, Finland, and Spain, with a market cap of £1.69 billion.

Operations: Grafton Group plc generates revenue from various segments including UK Distribution (£780.78 million), Ireland Distribution (£632.81 million), Netherlands Distribution (£337.58 million), Retailing (£261.06 million), Finland Distribution (£131.76 million), Manufacturing (£122.16 million), and Spain Distribution (£29.66 million).

Dividend Yield: 4.3%

Grafton Group offers a reliable dividend yield of 4.31%, though it falls short of the top UK payers. The company's dividends have grown steadily over the past decade, supported by sustainable payout ratios—60.8% from earnings and 36.5% from cash flows. Recent financials show a slight decline in sales to £2.28 billion and net income to £122 million for 2024, but strategic buybacks worth £30 million may bolster shareholder value while maintaining its progressive dividend policy with an increased total annual dividend of 37 pence per share.

• Click here to discover the nuances of Grafton Group with our detailed analytical dividend report.
• Our expertly prepared valuation report Grafton Group implies its share price may be lower than expected.

SThree (LSE:STEM)

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

Overview: SThree plc is a specialist recruitment company operating in the sciences, technology, engineering, and mathematics sectors across multiple countries including the UK, Germany, and the US with a market cap of £340.54 million.

Operations: SThree plc's revenue segments include the USA (£299.23 million), DACH (£456.05 million), Rest of Europe (£353.15 million), Middle East & Asia (£40.91 million), and Netherlands (including Spain) (£343.57 million).

Dividend Yield: 5.4%

SThree's dividend payments have been volatile, with recent reductions highlighting an unstable track record. The proposed final dividend of 9.2 pence per share marks a decrease from the previous year, totaling 14.3 pence for the year pending approval. Despite a reasonable payout ratio of 38.2%, earnings and cash flow coverage remain solid at 69.7%. However, SThree's removal from multiple FTSE indices signals potential challenges ahead as earnings are forecasted to decline by an average of 18.2% annually over the next three years.

• Dive into the specifics of SThree here with our thorough dividend report.
• Our valuation report here indicates SThree may be undervalued.

Turning Ideas Into Actions

• Delve into our full catalog of 54 Top UK Dividend Stocks here.
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Ready To Venture Into Other Investment Styles?

• 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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