Which UK Companies Pay The Best Dividend?

Summary

  • Companies’ have recently resumed making dividend pay outs after they were either paused or outrightly cancelled due to pandemic uncertainty.
  • Dividend investors seek to gain a steady passive income stream by investing in larger companies that have a long history of making steady dividend payments.

As the onset of the pandemic has caused significant market volatility, investors are increasingly looking at passive income generating investment strategies. One such strategy is investing in dividend paying stocks.

Investors have recently been cashing in on dividend paying stocks in the UK market after the economy showed early signs of recovery. Several companies had previously elected to either pause dividend pay outs or kept dividend growth rates relatively the same as the previous year due to pandemic related uncertainties.

Which companies commonly pay dividends?

Generally speaking, larger and more established companies who have a certain level of predictable revenue stream and profits are often the best dividend payers. Such companies usually issue dividend pay outs at regular intervals and aim to maximise a shareholder’s wealth.

While companies from a variety of sectors issue dividends, those from sectors such as basic materials, oil and gas, banks and financial, healthcare and pharmaceuticals and utilities have historically been observed to have a consistent dividend payments history.

Highest Dividend Paying FTSE Stocks 

In this article, we take a closer look at four FTSE listed companies with a five year average dividend yield of at least 8 per cent and above:

  1. EVRAZ PLC (LON: EVR) 

Evraz Plc is a Russian multinational steelmaking and mining company and is a constituent of the FTSE 100 index. The firm recently announced that it signed an agreement of cooperation with the government of the Kemerov region to set up a new casting and rolling mill.

The group will make an investment of up to US$ 650 million, and the mill will be launched in 2025. The project aims to create up to 350 jobs at the site.

(Image Source: Refinitiv) 

EVR’s shares were trading at GBX 621.20, down by 3.48 on 9 June at 14:53 HRS GMT+1, while the broader index FTSE 100 was trading at 7,078.24, down by 0.24 per cent.

EVR’s volume stood at 597,581, and its market cap was at £9.38 billion. Its five-year average dividend yield was at 9.7 per cent. 

Also Read: Evraz, Vast Resources, Greatland Gold, and Red Rock Resource - 4 Metals and Mining  

  1. M&G PLC (LON: MNG)

Another FTSE 100 listed company M&G PLC is a global investment management firm.

Investors in the firm’s property portfolio withdrew about £788 million since the suspension of withdrawing funds were lifted on 10 May. The company plans to have a cash weighting of 20 per cent following the suspension in order to improve its liquidity management.

(Image Source: Refinitiv) 

MNG’s shares were trading at GBX 241.70, down by 1.51 per cent on 9 June at 14:57 HRS GMT+1, while the financial services sectoral index was trading at 12,222.87, down by 1.16 per cent.

MNG’s volume stood at 1,676,954, and its market cap was at £6.38 billion. Its five-year average dividend yield was at 9.3 per cent. 

  1. Plus500 Ltd (LON: PLUS) 

Plus500 Ltd is a global fintech company and a constituent of the FTSE 250 index. It had recently announced the acquisition of US-based technology trading platform provider Cunningham Commodities LLC to gain entry into the US futures and options market.

The deal was worth up to US$30 million and will be funded from PLUS’ cash balances.

(Image Source: Refinitiv) 

PLUS’ shares were trading at GBX 1,434.50, down by 1.10 per cent on 9 June at 15:05 HRS GMT+1, while the FTSE 250 index was trading at 22,751.56, down by 0.63 per cent.

PLUS’ volume stood at 108,657, and its market cap was at £1.469 billion. Its five-year average dividend yield was at 9.1 per cent. 

  1. Imperial Brands PLC (LON: IMB)

FTSE 100 listed Imperial Brands is the fourth largest multinational tobacco company. The firm recently reported its H1 2021 results, its reported revenue rose by 3.5 per cent to US$15.6 billion, boosted by a 3.2 per cent rise in tobacco revenues and a 16.0 per cent increase in revenue from next-generation products over the year ago period.

The company also announced it would pay out a first half dividend of 42.12 pence per share, up from 41.70 pence per share from the previous year.

(Image Source: Refinitiv) 

IMB’s shares were trading flat at GBX 1,615.50 on 9 June at 15:11 HRS GMT+1, while the FTSE 250 index was trading at 22,751.56, down by 0.63 per cent.

PLUS’ volume stood at 355,433, and its market cap was at £15.284 billion. Its five-year average dividend yield was at 8.0 per cent.

Also Read: How are these two consumer stocks performing post-vaccine news: Imperial 


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