Top 3 UK Dividend Stocks To Enhance Your Portfolio

The London markets have recently faced challenges, with the FTSE 100 index closing lower due to weak trade data from China, highlighting ongoing global economic uncertainties. In such a volatile environment, dividend stocks can offer a reliable income stream and potential stability for investors looking to enhance their portfolios.

Top 10 Dividend Stocks In The United Kingdom

Name	Dividend Yield	Dividend Rating
James Latham (AIM:LTHM)	5.69%	★★★★★★
4imprint Group (LSE:FOUR)	3.09%	★★★★★☆
Impax Asset Management Group (AIM:IPX)	7.58%	★★★★★☆
Dunelm Group (LSE:DNLM)	6.66%	★★★★★☆
Big Yellow Group (LSE:BYG)	3.82%	★★★★★☆
Man Group (LSE:EMG)	5.88%	★★★★★☆
DCC (LSE:DCC)	3.82%	★★★★★☆
Hargreaves Services (AIM:HSP)	6.02%	★★★★★☆
NWF Group (AIM:NWF)	4.76%	★★★★★☆
Grafton Group (LSE:GFTU)	3.52%	★★★★★☆

Click here to see the full list of 58 stocks from our Top UK Dividend Stocks screener.

Here's a peek at a few of the choices from the screener.

Brooks Macdonald Group (AIM:BRK)

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

Overview: Brooks Macdonald Group plc, with a market cap of £316.19 million, offers investment and wealth management services to private clients, pension funds, professional intermediaries, and trustees in the United Kingdom, Isle of Man, and the Channel Islands.

Operations: Brooks Macdonald Group plc generates revenue of £19.62 million from its international segment.

Dividend Yield: 3.8%

Brooks Macdonald Group's dividend payments have been stable and growing over the past decade, though their high payout ratio (162.6%) indicates dividends are not well covered by earnings. However, with a cash payout ratio of 34.2%, dividends are well supported by cash flows. Recent executive changes, including the appointment of Andrea Montague as CEO and Greg Mullins as head of adviser solutions, aim to strengthen leadership and focus on meeting IFA needs. The stock trades 15.7% below fair value estimates but offers a modest yield (3.84%) compared to top UK dividend payers (5.64%).

• Delve into the full analysis dividend report here for a deeper understanding of Brooks Macdonald Group.
• Insights from our recent valuation report point to the potential overvaluation of Brooks Macdonald Group shares in the market.

M.P. Evans Group (AIM:MPE)

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

Overview: M.P. Evans Group PLC, with a market cap of £449.85 million, operates through its subsidiaries to own and develop oil palm plantations in Indonesia and Malaysia.

Operations: M.P. Evans Group PLC generates $307.32 million from its plantation operations in Indonesia.

Dividend Yield: 5.1%

M.P. Evans Group has a reasonable payout ratio (58.7%) and cash payout ratio (64.4%), indicating dividends are covered by earnings and cash flows, though its dividend history has been volatile over the past decade. Recent production results show increased crude palm oil output to 177,000 tonnes for the first half of 2024, up from 166,200 tonnes last year. The company also initiated a share buyback program worth £2 million to enhance shareholder value but trades below fair value estimates by analysts.

• Take a closer look at M.P. Evans Group's potential here in our dividend report.
• The analysis detailed in our M.P. Evans Group valuation report hints at an deflated share price compared to its estimated value.

Castings (LSE:CGS)

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

Overview: Castings P.L.C. is involved in iron casting and machining operations across the United Kingdom, Europe, the Americas, and internationally, with a market cap of £153.84 million.

Operations: Castings P.L.C. generates revenue from two primary segments: Foundry Operations (£250.98 million) and Machining Operations (£37.65 million).

Dividend Yield: 7.2%

Castings P.L.C. has consistently increased dividends over the past decade, with a recent 5.6% rise to 18.32 pence per share for the year and an additional special dividend of 7 pence per share. Despite a high cash payout ratio of 100.4%, dividends are well covered by earnings with a payout ratio of 47.6%. The company's net income grew to £16.72 million, supported by sales of £224.41 million, reflecting strong financial performance and shareholder returns through buybacks worth £0.4 million.

• Click to explore a detailed breakdown of our findings in Castings' dividend report.
• Our valuation report here indicates Castings may be undervalued.

Where To Now?

• Get an in-depth perspective on all 58 Top UK Dividend Stocks by using our screener here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Looking For Alternative Opportunities?

• 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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