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Highlights
Investing in dividend stocks is one of the great ways to generate a stable income stream.
It can contribute significantly to the total returns from an investor’s portfolio.
Before investing in dividend stocks, it is important to conduct research considering factors other than high dividend yield to maximise the overall returns.
Dividends are the profits that are distributed by the company among its shareholders, and it is a great source of regular income for people who believe in stock investments. Despite dividend payments appearing to be insubstantial in the short term, they can potentially make up a significant proportion of the total returns from your stock market investments in the long term.
Dividend stocks have many benefits, which include generating a sizable passive income stream, which can grow by reinvestment through the process of compounding and protecting the investors during the times of market volatility as they tend to fall less than growth stocks during these periods.
There are a lot of factors and parameters to consider while assessing the strength of a company or its stocks. Thus, before investing, it is important for the dividend investor to conduct meticulous research to understand the financial status, competitive standing, growth path and management efficiency of the company. The investor’s portfolio can grow immensely by adding high-yield dividend stocks to it, but it is necessary to ensure the reliability of the stock and avoid buying stocks while only considering higher dividend yield. All factors should be simultaneously considered to maximise the risk-adjusted returns.
ALSO READ: Dividend Tax: Which stocks to buy in your ISA?
Let’s look at some of the top dividend paying UK stocks.
Evraz plc (LON: EVR)
Headquartered in London, Evraz plc is a UK-based multinational vertically integrated steel making and mining company. With a significant market capitalisation of £8,545.00 million, the company is listed on the London Stock Exchange since 2005 and is also a constituent of the FTSE 100 index. Its Earnings per share is 0.58 and it has given a return of 79.43% in 1 year. Its dividend yield in 2020 was 9.20, and its 5-year average dividend yield is 10.2%. Evraz plc’s shares were trading at GBX 596.40 at 11:52 AM as on 15 September 2021.
Diversified Energy Company PLC (LON:DEC)
Headquartered in Alabama, Diversified Energy Company plc is an oil and gas production company with operations in the Appalachian Basin, US. With a market capitalisation of £951.56 million, the company is listed on the London Stock Exchange since 2017 and is also a constituent of the FTSE 250 index. Its Earnings per share is -0.03 and it has given a return of 8.81% in 1 year. Its dividend yield in 2020 was 9.80, and its 5-year average dividend yield is 7.5%. Diversified Energy Company plc’s shares were trading at GBX 113.40 at 11:55 AM as on 15 September 2021.
ALSO READ: How to invest in dividend stocks in UK
CMC Markets Plc (LON: CMCX)
Headquartered in London, CMC Markets Plc is a UK-based financial services company that provides services like online trading in shares and spread betting etc. across the globe. With a market capitalisation of £807.23 million, the company is listed on the London Stock Exchange since 2016, and is also a constituent of the FTSE 250 index. Its earnings per share is 0.62 and it has given a negative return of 15.58% in 1 year. Its dividend yield in 2021 was 6.30, and its 5-year average dividend yield is 4.8%. CMC Markets plc’s shares were trading at GBX 276.00 at 11:58 AM as on 15 September 2021.
BHP Group PLC (LON: BHP)
Headquartered in Melbourne, Australia, BHP Group PLC is a global resources company which produces iron ore, copper, and nickel etc. With a substantial market capitalisation of £42,790.57 million, the company is listed on the London Stock Exchange since 1997 and is also a constituent of the FTSE 100 index. Its Earnings per share is 1.57 and it has given a return of 15.92% in 1 year. Its dividend yield in 2021 was 10.20, and its 5-year average dividend yield is 4.9%. BHP Group plc’s shares were trading at GBX 2,032.50 at 12:01 PM as on 15 September 2021.
Ferrexpo PLC (LON: FXPO)
Headquartered in Baar, Switzerland, Ferrexpo PLC is a commodity trading and mining company. It is the world’s third largest exporter of iron ore pellets. With a market capitalisation of £2,022.51 million, the company is listed on the London Stock Exchange since 2007 and is also a constituent of the FTSE 250 index. Its Earnings per share is 0.69 and it has given a return of 79.40% in 1 year. Its dividend yield in 2020 was 3.40, and its 5-year average dividend yield is 3.3%. Ferrexpo plc’s shares were trading at GBX 339.60 at 12:06 PM as on 15 September 2021.
