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Highlights
-The UK consumer price inflation has recently hit a 30-year high of 7%, and it may even cross the 10% mark by the end of this year.
-Dividend stocks are considered good investment options amid rising inflation as they offer a stable stream of passive income to investors.
The UK consumer price inflation has recently hit a 30-year high of 7%, and it may even cross the 10% mark by the end of this year, as per the estimates given by the Bank of England. A cost-of-living crisis has been spiraling in the country and households are taking the brunt of rising prices while manufacturers and retailers are busy passing on the higher costs to them.
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Food and energy bills have been soaring while the real wages of households are falling, and taxes are rising. According to several analysts, the UK economy may even be headed towards stagflation. The recent escalation of the Russia-Ukraine crisis has also impacted the UK economy, directly as well as indirectly.
Amid all this chaos, UK investors are exploring ways to make the maximum possible gains. Hence, dividend-paying stocks are on the radar of investors. Dividend stocks are considered to be a good buy when inflation levels are high as they offer investors a stable stream of passive income amid the rising uncertainty.
As per Link Group’s latest dividend monitor, the dividend payouts in the UK have soared to £13.3 billion. With a robust start in 2022, UK dividends went up to £14.2 billion in the first quarter of the year, but after taking BHP’s exit and lower one-off special dividends into consideration, the adjusted underlying total stood at £13.3 billion.
RELATED READ: 5 recent developments you may want to know about the UK economy
Here are 5 dividend-paying stocks that UK investors can keep an eye on in May.
Diversified Energy Company plc (LON: DEC)
The shares of the independent oil and gas production business, Diversified Energy Company plc, were down by 0.09% at 8:46 AM (GMT+1) on 27 April 2022, at GBX 116.70. The company, which is a constituent of the FTSE 250 index, has provided its shareholders with a return of 5.71% over the last one year as of 27 April 2022. With a market cap of £993.43 million, Diversified Energy Company is offering a dividend yield of 11.3% a year as of 27 April 2022.
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M&G plc (LON: MNG)
The shares of the global investment manager, M&G plc, were up by 0.57% at 8:47 AM (GMT+1) on 27 April 2022, at GBX 212.60. The company, which is a constituent of the FTSE 100 index, has provided its shareholders with a return of 0.05% over the last one year as of 27 April 2022. With a market cap of £5,471.92 million, M&G is offering a dividend yield of 8.7% a year as of 27 April 2022.
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Imperial Brands plc (LON: IMB)
The shares of the UK-based tobacco firm, Imperial Brands plc, were down by 0.46% at 8:50 AM (GMT+1) on 27 April 2022, at GBX 1,617.00. The company, which is a constituent of the FTSE 100 index, has provided its shareholders with a return of 9.04% over the last one year as of 27 April 2022. With a market cap of £15,439.38 million, Imperial Brands is offering a dividend yield of 8.6% a year as of 27 April 2022.
Tags: dividend stocks, inflation, passive income, Imperial Brands, M&G, Diversified Energy company, FTSE 100, FTSE 250
