December 2024’s Best UK Dividend Stocks

As the United Kingdom’s FTSE 100 index experiences volatility due to weak trade data from China and fluctuating commodity prices, investors are increasingly seeking stability in their portfolios. In such uncertain times, dividend stocks can offer a reliable source of income, making them an attractive option for those looking to navigate the current market challenges while benefiting from regular payouts.

Click here to see the full list of 61 stocks from our Top UK Dividend Stocks screener.

Let’s dive into some prime choices out of the screener.

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

Overview: Next 15 Group plc, along with its subsidiaries, offers communications services across the United Kingdom, Europe, Africa, the United States, and the Asia Pacific with a market cap of £385.89 million.

Operations: Next 15 Group plc generates its revenue through providing communications services across various regions, including the United Kingdom, Europe, Africa, the United States, and the Asia Pacific.

Dividend Yield: 4%

Next 15 Group’s dividend payments are well covered by both earnings and cash flows, with low payout ratios of 25.2% and 23.3%, respectively. However, the company’s dividends have been unreliable over the past decade, showing volatility with significant drops at times. Despite this instability, Next 15 Group offers good relative value compared to peers and trades significantly below its estimated fair value. Earnings grew substantially last year but are forecasted to decline in coming years.

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

Overview: Vertu Motors plc is an automotive retailer operating in the United Kingdom with a market cap of £192.94 million.

Operations: Vertu Motors plc generates revenue primarily from its Retail – Gasoline & Auto Dealers segment, amounting to £4.79 billion.

Dividend Yield: 4.1%

Vertu Motors’ dividends are well covered by both earnings and cash flows, with payout ratios of 41.8% and 17.5%, respectively. However, the company’s dividend history is marked by volatility over the past decade. Recent share buybacks worth £3 million aim to enhance shareholder value amidst declining net income of £15.96 million for the half-year ending August 2024, down from £22.42 million a year ago, reflecting tighter profit margins despite increased sales revenue of £2.49 billion.

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

Overview: Intermediate Capital Group plc is a private equity firm specializing in direct and fund of fund investments, with a market cap of £5.99 billion.

Operations: Intermediate Capital Group’s revenue is primarily derived from its Investment Company segment, generating £214.10 million, and its Fund Management Company segment, contributing £708.50 million.

Dividend Yield: 3.9%

Intermediate Capital Group’s dividend payments are covered by earnings and cash flows, with payout ratios of 57.1% and 51.2%, respectively, though its dividend history shows volatility over the past decade. The company plans to increase dividends annually by mid-single digits, recently declaring an interim dividend of £0.263 per share for January 2025. Despite a drop in half-year revenue to £405.3 million and net income to £152.5 million, strategic expansions into North America may bolster future growth prospects.

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.

Companies discussed in this article include AIM:NFG AIM:VTU and LSE:ICG.

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