Top 3 UK Dividend Stocks For Income Growth

Over the last 7 days, the United Kingdom market has experienced a slight decline of 1.0%, yet it has shown resilience with a 6.9% increase over the past year and an optimistic forecast of 15% annual earnings growth. In this context, selecting dividend stocks that offer both reliable income and potential for growth can be a strategic approach for investors seeking to capitalize on these market conditions.

Top 10 Dividend Stocks In The United Kingdom

Name	Dividend Yield	Dividend Rating
James Latham (AIM:LTHM)	6.13%	★★★★★★
Keller Group (LSE:KLR)	3.25%	★★★★★☆
Impax Asset Management Group (AIM:IPX)	8.28%	★★★★★☆
4imprint Group (LSE:FOUR)	3.07%	★★★★★☆
OSB Group (LSE:OSB)	8.81%	★★★★★☆
Man Group (LSE:EMG)	6.26%	★★★★★☆
Plus500 (LSE:PLUS)	6.46%	★★★★★☆
Big Yellow Group (LSE:BYG)	3.82%	★★★★★☆
Grafton Group (LSE:GFTU)	3.82%	★★★★★☆
Dunelm Group (LSE:DNLM)	7.10%	★★★★★☆

Click here to see the full list of 65 stocks from our Top UK Dividend Stocks screener.

Underneath we present a selection of stocks filtered out by our screen.

Hargreaves Services (AIM:HSP)

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

Overview: Hargreaves Services Plc offers environmental and industrial services across the United Kingdom, Europe, Hong Kong, and internationally with a market cap of £194.47 million.

Operations: Hargreaves Services Plc generates its revenue primarily from its Services segment, which accounts for £206.86 million, and additionally from Hargreaves Land with £7.04 million.

Dividend Yield: 6.1%

Hargreaves Services offers a high dividend yield of 6.1%, placing it in the top 25% of UK dividend payers, but its dividends have been volatile and not well covered by earnings, with a high payout ratio of 94.8%. Recent executive changes aim to transition Hargreaves Land to a capital-lite model. Despite trading below estimated fair value, significant insider selling raises concerns about stability and future performance for dividend investors.

• Navigate through the intricacies of Hargreaves Services with our comprehensive dividend report here.
• The analysis detailed in our Hargreaves Services valuation report hints at an inflated share price compared to its estimated value.

Somero Enterprises (AIM:SOM)

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

Overview: Somero Enterprises, Inc. designs, assembles, remanufactures, sells, and distributes concrete leveling, contouring, and placing equipment both in the United States and internationally with a market cap of £162.05 million.

Operations: Somero Enterprises, Inc. generates revenue of $113.69 million from its construction machinery and equipment segment.

Dividend Yield: 8.2%

Somero Enterprises offers a dividend yield of 8.19%, ranking in the top 25% among UK dividend payers, but its dividends are not well covered by cash flows, with a high cash payout ratio of 104.3%. Although dividends have grown over the past decade, they have been volatile and unreliable. Recent earnings showed decreased sales and net income compared to last year, while share buybacks totaled $2 million for the period ending June 2024.

• Get an in-depth perspective on Somero Enterprises' performance by reading our dividend report here.
• Our valuation report here indicates Somero Enterprises may be overvalued.

Conduit Holdings (LSE:CRE)

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

Overview: Conduit Holdings Limited, along with its subsidiaries, offers reinsurance products and services globally and has a market cap of £758.99 million.

Operations: Conduit Holdings Limited generates its revenue from three main segments: Casualty ($174.60 million), Property ($320 million), and Specialty ($124.30 million).

Dividend Yield: 5.9%

Conduit Holdings' dividend yield of 5.88% places it in the top 25% of UK dividend payers, with strong coverage by earnings and cash flows due to low payout ratios of 27.2% and 15.9%, respectively. Despite this, its three-year dividend history is marked by volatility and lack of growth, making reliability a concern. The company's price-to-earnings ratio is favorable at 4.6x compared to the UK market average, suggesting good relative value despite an unstable dividend track record.

• Click here and access our complete dividend analysis report to understand the dynamics of Conduit Holdings.
• The analysis detailed in our Conduit Holdings valuation report hints at an deflated share price compared to its estimated value.

Next Steps

• Reveal the 65 hidden gems among our Top UK Dividend Stocks screener with a single click here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Contemplating Other Strategies?

• 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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