UK Top 40 Quality Dividend Stocks: 2024 Q2

dividend stocks Apr 11, 2024
UK Top Quality Dividend Stocks 2024 Q2

I first started publishing and updating a list of the top 40 UK dividend stocks in 2022 and, so far, I think it's done what I intended: to provide investors with a simple and free starting point for identifying potential investment candidates.

However, the list has received fairly regular criticism that it puts too much weight on high dividend yields, and that's a criticism I readily accept. The list ranks stocks based on their market cap and dividend yield alone, but in practice, I certainly don't invest in stocks just because they have a high yield; they're usually the first stocks to cut or suspend their dividend and that's not what I'm looking for.

What I am looking for is quality dividend stocks with long track records of progressive dividend growth, and while dividend yield is still important, it's a secondary consideration.

So, there is something of a mismatch between the type of stocks I like to invest in (quality dividend stocks) and the type of stocks that dominate the top of the top 40 list (high-yield dividend stocks), and that's why I've decided to update the list's selection and sorting rules from today.

I'll detail the new rules at the bottom of this blog post, but here's a quick summary:

  • Selecting
    • The list now only includes stocks from the FTSE All-Share and AIM UK 50 indices that have at least a ten-year record of progressive dividend growth (holding or raising their dividend every year)
    • Stocks are only included if the consensus forecast is for a maintained or increased dividend next year (so high probability dividend cutters are excluded)
  • Sorting
    • Selected stocks are sorted by a combination of market cap and dividend yield so that the highest-ranked stocks are those with the best combination of large size (as these tend to be more robust than smaller companies) and high yield (as this is important for most dividend investors)

Data for this list is kindly provided by SharePad.

Compared to the previous rules, these are far more reflective of the kind of high-quality progressive dividend stocks I like to invest in, and I'm looking forward to reviewing and learning from this collection of companies over the coming months and years.

If you'd like to investigate any of these companies yourself, feel free to use my dividend investing tools.

No. Name (and link to review) EPIC Index Sector Share Price Dividend Yield (%)
1 British American Tobacco PLC BATS FTSE 100 Tobacco £23.18 10.0
2 Legal & General Group PLC LGEN FTSE 100 Life Insurance £2.52 8.1
3 National Grid PLC NG. FTSE 100 Gas, Water and Multi-utilities £10.33 5.4
4 Phoenix Group Holdings PHNX FTSE 100 Life Insurance £5.53 9.5
5 Unilever PLC ULVR FTSE 100 Personal Care, Drug and Grocery Stores £38.21 3.9
6 Reckitt Benckiser Group PLC RKT FTSE 100 Personal Care, Drug and Grocery Stores £42.40 4.5
7 Schroders PLC SDR FTSE 100 Investment Banking and Brokerage Services £3.75 5.7
8 Diageo PLC DGE FTSE 100 Beverages £28.09 2.9
9 IG Group Holdings PLC IGG FTSE 250 Investment Banking and Brokerage Services £7.25 6.2
10 Hargreaves Lansdown PLC HL. FTSE 250 Investment Banking and Brokerage Services £7.34 5.7
11 Severn Trent PLC SVT FTSE 100 Gas, Water and Multi-utilities £23.82 4.5
12 United Utilities Group PLC UU. FTSE 100 Gas, Water and Multi-utilities £10.12 4.5
13 Smurfit Kappa Group PLC SKG FTSE 100 General Industrials £36.38 3.6
14 Ashmore Group PLC ASHM FTSE 250 Investment Banking and Brokerage Services £1.93 8.8
15 BAE Systems PLC BA. FTSE 100 Aerospace and Defense £12.77 2.4
16 AstraZeneca PLC AZN FTSE 100 Pharmaceuticals, Biotechnology and Marijuana Producers £107.08 2.1
17 Liontrust Asset Management PLC LIO Small Cap Investment Banking and Brokerage Services £6.68 10.8
18 Polar Capital Holdings PLC POLR AIM UK 50 Investment Banking and Brokerage Services £4.48 10.3
19 Smith & Nephew PLC SN. FTSE 100 Medical Equipment and Services £9.74 3.1
20 Rathbone Brothers PLC RAT FTSE 250 Investment Banking and Brokerage Services £15.80 5.3
21 RWS Holdings PLC RWS AIM UK 50 Industrial Support Services £1.96 6.2
22 Bunzl PLC BNZL FTSE 100 General Industrials £29.52 2.3
23 RELX PLC REL FTSE 100 Media £33.20 1.8
24 Chesnara PLC CSN Small Cap Life Insurance £2.79 8.6
25 IMPAX Asset Management Group PLC IPX AIM UK 50 Investment Banking and Brokerage Services £4.50 6.1
26 Moneysupermarket.com Group PLC MONY FTSE 250 Software and Computer Services £2.14 5.7
27 DCC PLC DCC FTSE 100 Industrial Support Services £55.00 3.4
28 Telecom plus PLC TEP FTSE 250 Telecommunications Service Providers £16.46 4.9
29 Hikma Pharmaceuticals PLC HIK FTSE 100 Pharmaceuticals, Biotechnology and Marijuana Producers £18.17 3.1
30 Intertek Group PLC ITRK FTSE 100 Industrial Support Services £48.56 2.3
31 City of London Investment Group PLC CLIG Small Cap Investment Banking and Brokerage Services £3.20 10.3
32 Croda International PLC CRDA FTSE 100 Chemicals £47.00 2.3
33 M.P. Evans Group PLC MPE AIM UK 50 Food Producers £8.74 5.2
34 Ocean Wilson Holdings PLC OCN Small Cap Industrial Transportation £13.60 4.9
35 RS Group PLC RS1 FTSE 100 Industrial Support Services £7.11 2.9
36 Sage Group (The) PLC SGE FTSE 100 Software and Computer Services £12.05 1.6
37 Ashtead Group PLC AHT FTSE 100 Industrial Transportation £57.42 1.4
38 Experian PLC EXPN FTSE 100 Industrial Support Services £33.70 1.3
39 James Halstead PLC JHD AIM UK 50 Construction and Materials £1.97 4.1
40 Bodycote PLC BOY FTSE 250 Construction and Materials £6.98 3.3

Here are the new sort and select rules in a bit more detail:

Select stocks that:

  1. Are constituents of the FTSE All-Share or AIM UK 50 indices
  2. Paid a dividend every year for the last ten years
  3. Held or raised their dividend in every one of the last ten years
  4. Have a consensus forecast for a held or raised dividend next year

Sort the selected stocks by:

  1. Size: Assign each stock a size rank, with the highest market cap having a size rank of 1
  2. Yield: Assign each stock a yield rank, with the highest yield having a yield rank of 1
  3. Size and Yield: Sum the size and yield rank for each stock; sort the list by the combined rank in ascending order so the stock with the best combination of large size and high dividend yield is at the top of the list
  4. Top 40: Remove any stocks outside the top 40

You can also download the latest version of the list in PDF format here: UK Top 40 Quality Dividend Stocks

The UK Dividend Stocks Newsletter

"An excellent newsletter with a real commitment to transparency" - Edward Page-Croft, CEO of Stockopedia

 ✔ Full list of all holdings in the UK Dividend Stocks Portfolio

✔ Detailed reviews of every buy, sell, trim and top-up decision

✔ Brief reviews of all quarterly, interim and annual results for all holdings

✔ Unique UK dividend stock screen covering almost 200 stocks

✔ In continuous publication since 2011

READ THE NEWSLETTER

The UK Dividend Stocks Blog

Get the latest blog posts sent straight to your inbox in no more than one email per week:

âś” Monthly Top 40 High-Yield Blue-Chip UK Stocks list

âś” Detailed reviews of UK dividend stocks

✔ Updates on the UK Dividend Stocks Portfolio

✔ UK stock market and housing market valuations

No spam. Unsubscribe anytime.

This website provides information, education and tools for investors. It does not provide financial advice or recommendations to buy or sell any specific investment. If you're not sure if an investment is right for you, you should speak to a regulated financial adviser. Please read the disclaimer for more details.