3 Top UK Dividend Stocks Yielding Up To 5.6%

The UK market has been under pressure recently, with the FTSE 100 closing lower due to weak trade data from China and declining commodity prices affecting key sectors. Despite these challenges, dividend stocks remain an attractive option for investors seeking steady income in uncertain times. Here are three top UK dividend stocks yielding up to 5.6% that could offer stability and reliable returns amidst the current market volatility.

Top 10 Dividend Stocks In The United Kingdom

Name	Dividend Yield	Dividend Rating
James Latham (AIM:LTHM)	5.75%	★★★★★★
Impax Asset Management Group (AIM:IPX)	7.01%	★★★★★☆
Big Yellow Group (LSE:BYG)	3.50%	★★★★★☆
4imprint Group (LSE:FOUR)	3.04%	★★★★★☆
Keller Group (LSE:KLR)	3.01%	★★★★★☆
Dunelm Group (LSE:DNLM)	6.29%	★★★★★☆
Plus500 (LSE:PLUS)	5.58%	★★★★★☆
DCC (LSE:DCC)	3.71%	★★★★★☆
NWF Group (AIM:NWF)	4.84%	★★★★★☆
Grafton Group (LSE:GFTU)	3.41%	★★★★★☆

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

Let's review some notable picks from our screened stocks.

Halfords Group (LSE:HFD)

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

Overview: Halfords Group plc, with a market cap of £309.29 million, operates in the United Kingdom offering motoring and cycling products and services through its subsidiaries.

Operations: Halfords Group plc generates revenue from two main segments: £997.10 million from Retail and £699.40 million from Autocentres.

Dividend Yield: 5.6%

Halfords Group reported a full-year sales increase to £1.70 billion, but net income fell to £16.9 million from £28.1 million the previous year. Despite this, its dividends are well-covered by earnings (payout ratio: 60%) and cash flows (cash payout ratio: 14.3%). However, the dividend track record is unstable and has declined over the past decade, though the current yield of 5.65% remains attractive compared to peers in the UK market.

• Click to explore a detailed breakdown of our findings in Halfords Group's dividend report.
• The valuation report we've compiled suggests that Halfords Group's current price could be quite moderate.

IG Group Holdings (LSE:IGG)

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

Overview: IG Group Holdings plc is a fintech company that operates in the online trading business globally, with a market cap of £3.57 billion.

Operations: IG Group Holdings plc generates revenue primarily from its brokerage segment, which accounted for £954.50 million.

Dividend Yield: 4.7%

IG Group Holdings announced a final dividend of 32.64 pence per share, bringing the total for the year to 46.2 pence, a slight increase from last year. The company's dividends are well-covered by earnings (payout ratio: 58.2%) and cash flows (cash payout ratio: 44.5%). Despite a decrease in net income to £307.7 million, IGG continues its share repurchase program with £150 million allocated for buybacks through January 2025, indicating strong capital management practices.

• Unlock comprehensive insights into our analysis of IG Group Holdings stock in this dividend report.
• The analysis detailed in our IG Group Holdings valuation report hints at an deflated share price compared to its estimated value.

Norcros (LSE:NXR)

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

Overview: Norcros plc, with a market cap of £199.30 million, develops, manufactures, and markets bathroom and kitchen products in the United Kingdom, Ireland, and South Africa.

Operations: Norcros plc generates £392.10 million in revenue from its Building Products segment.

Dividend Yield: 4.6%

Norcros declared a final dividend of 6.8 pence per share, maintaining its total annual dividend at 10.2 pence. Despite revenue dropping to £392.1 million from £441 million, net income rose to £26.8 million from £16.8 million, indicating improved profitability. The dividends are well-covered by both earnings (payout ratio: 33.9%) and cash flows (cash payout ratio: 31.3%). However, the company's dividend history has been volatile and unreliable over the past decade.

• Delve into the full analysis dividend report here for a deeper understanding of Norcros.
• In light of our recent valuation report, it seems possible that Norcros is trading behind its estimated value.

Summing It All Up

• Embark on your investment journey to our 58 Top UK Dividend Stocks selection here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
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Seeking Other Investments?

• 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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