3 Dividend Stocks In The UK With Up To 7.1% Yield

In the wake of recent economic data from China, the UK's FTSE 100 and FTSE 250 indices have experienced declines, reflecting broader concerns about global trade and commodity demand. Amid these market fluctuations, dividend stocks can offer a measure of stability by providing consistent income streams, making them an attractive option for investors seeking resilience in uncertain times.

Top 10 Dividend Stocks In The United Kingdom

Click here to see the full list of 60 stocks from our Top UK Dividend Stocks screener.

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

Associated British Foods (LSE:ABF)

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

Overview: Associated British Foods plc is a diversified company engaged in food, ingredients, and retail operations globally, with a market cap of £14.57 billion.

Operations: Associated British Foods generates revenue through its diverse segments, including £2.53 billion from Sugar, £9.45 billion from Retail, £4.24 billion from Grocery, £1.65 billion from Agriculture, and £2.13 billion from Ingredients.

Dividend Yield: 4.4%

Associated British Foods' dividend yield of 4.44% is below the top UK payers, and its dividends have been volatile over the past decade. Despite this, dividends are well-covered by earnings and cash flows with payout ratios of 32.5% and 38.3%, respectively. Recent affirmations include a 20.7 pence interim dividend payable in July 2025, even as Allied Bakeries faces challenges prompting strategic evaluations to enhance shareholder value amidst M&A discussions with Endless LLP.

• Unlock comprehensive insights into our analysis of Associated British Foods stock in this dividend report.
• Our valuation report unveils the possibility Associated British Foods' shares may be trading at a discount.

Castings (LSE:CGS)

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

Overview: Castings P.L.C. is involved in iron casting and machining operations across various international markets, including the UK, Europe, and the Americas, with a market cap of £111.25 million.

Operations: Castings P.L.C. generates revenue through its Foundry Operations, contributing £225.67 million, and Machining Operations, adding £35.57 million.

Dividend Yield: 7.2%

Castings offers a dividend yield of 7.19%, placing it among the top UK payers, but its dividends have been volatile and are not supported by free cash flows. Despite this, the payout ratio is reasonable at 66.1%, indicating coverage by earnings. However, the lack of free cash flow raises concerns about sustainability. The stock trades at 49.8% below estimated fair value, which may appeal to value-focused investors despite anticipated earnings declines over the next three years.

• Get an in-depth perspective on Castings' performance by reading our dividend report here.
• The analysis detailed in our Castings valuation report hints at an deflated share price compared to its estimated value.

Pets at Home Group (LSE:PETS)

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

Overview: Pets at Home Group Plc operates as a specialist omnichannel retailer of pet food, related products, and accessories in the United Kingdom with a market cap of £1.11 billion.

Operations: Pets at Home Group's revenue is derived from its Retail segment, which generated £1.33 billion, and its Vet Group segment, which contributed £161.10 million.

Dividend Yield: 5.2%

Pets at Home Group offers a dividend yield of 5.23%, which is below the top UK payers, but its dividends are well-covered by both earnings (payout ratio: 67.3%) and cash flows (cash payout ratio: 35.8%). The company has maintained stable and reliable dividend payments over the past decade, with consistent growth. Trading at a price-to-earnings ratio of 12.1x, it presents good value compared to the broader UK market average of 16x.

• Dive into the specifics of Pets at Home Group here with our thorough dividend report.
• Our expertly prepared valuation report Pets at Home Group implies its share price may be lower than expected.

Make It Happen

• Unlock our comprehensive list of 60 Top UK Dividend Stocks by clicking here.
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Want To Explore Some Alternatives?

• 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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