Dividend stocks are great investments in the stock market because they pay out regular dividends every year. The income from these dividends can add up over time. It's not always worth just buying any dividend stock, but it is a good idea to buy some of the best ones.

Dividends are paid out as cash or reinvested back into the company. This means that you get more money each and every year. If you're looking for ways to invest your money, then this is one of the most effective ways to do so. You should be looking at companies with strong growth potential and high yields. These two things will help you increase your chances of success when investing in dividend stocks.

I am not a financial advisor. Please speak to a financial advisor for any financial decisions. Everything in my blog is based of my own opinions.

What are Dividends?

A dividend (also known as a distribution) is an official payment made by a corporation to its shareholders. A dividend is usually announced during the month prior to the ex-dividend date. When the ex-dividends date passes, the shares become eligible to receive the next scheduled dividend. Companies often cut their dividend payments if they have negative earnings per share. However, there are exceptions to this rule. The dividend yield is a percentage ratio of the dividend payout value against the share prices.

For example, if a company has positive earnings per share, they may choose to keep paying dividends even though they have negative earnings. In addition, many companies have increased their dividend payments over the past few years. Some companies raise their dividends annually, while others only do so once every three or four years.

What are dividend growth stocks?

The term "dividend growth" refers to the fact that the annual dividend payout increases over time. Companies will often try to grow their dividend payments over time. They might also choose to maintain a stable dividend rate. Many investors prefer to purchase stocks that offer higher dividend yields than those that don't.

1. Persimmon PLC - 11.34%

Persimmon PLC is a leading international supplier of fresh produce to the foodservice and retail sectors, with operations in Europe, North America, Australia and Asia. The company has an attractive dividend yield of 11.34%, which makes it one of the best dividend stocks for investors looking for high returns on their money. It also offers a good value proposition as its shares are trading at a price-to-earnings ratio of just 8.45 times earnings per share.

2. BHP Group - 11.20%

BHP Group plc is one of the world's largest mining companies. Its products include iron ore, coal, copper, nickel, petroleum coke, aluminium, lead, zinc, gold, silver, limestone, diamonds, bauxite, pot ash, thermal coal, natural gas and energy. The company has a market capitalisation of $165 billion and employs more than 100,000 people worldwide. In addition, BHP is ranked among the top ten most valuable brands by Interbrand.

3. Rio Tinto - 10.28%

Rio Tinto plc is one of the worlds biggest diversified resources companies. It has interests in iron ore, copper, aluminium, base metals, coal, uranium, potash, alumina, diamonds, oil sands, and other commodities. The company operates in over 60 countries around the globe, employing approximately 81,000 people. Rio Tinto is headquartered in London and listed on the Australian Stock Exchange (ASX) and New York Stock Exchange (NYSE).

4. M&G PLC - 8.85%

M&G PLC is one of the United Kingdom's leading property development companies. It focuses on acquiring land for residential and commercial developments where it invests from £10 million upwards. Over the past five years, M&G has acquired several large portfolios including sites in Croydon, West Hampstead, Kingston upon Thames, Harrow, Watford, and much more.

5. Imperial Brands PLC - 8.22%

Imperial Brands plc is a British multinational tobacco company that manufactures cigarettes and cigars. It also owns licensed cigarette brand names such as Lucky Strike, Pall Mall, Kent and Gauloises. It was founded in 1901 and is headquartered in London. They employ about 30,000 people globally. Their brands are sold in more than 180 countries. In addition, Imperial Brands is well known for its sponsorship of various sporting events and entertainment activities.

6. Taylor Wimpey PLC - 7.06%

Taylor Wimpey PLC is one of Britain's leading house builders. It develops housing projects in England, Scotland and Wales. The company primarily builds houses under the "Taylor Wimpey" brand name. It also produces homes through joint ventures with other companies. Taylor Wimpey is traded on both the AIM and main markets of the London Stock Exchange.

7. BRITISH AMERICAN TOBACCO - 6.52%

British American Tobacco plc is a global tobacco company. It holds interests in many different areas of the industry, including manufacturing, marketing, distribution and research & development. BAT is based out of U.K., but engages in business activities globally. It is organised into four major divisions: Cigarettes, International Businesses, Smokeless Products and Knowledge & Information Services.

8. Phoenix Group Holdings PLC - 8.21%

Phoenix Group Holdings plc is a holding company for various businesses. It mainly deals with investments in real estate. It is based in the United Kingdom. They own or operate shopping centres, hotels, office buildings, industrial properties and residential properties across Europe. They are best known for their ownership of the Bluewater Shopping Centre in Kent, United Kingdom.

9. Anglo American PLC - 6.65%

Anglo American plc is an international mining company. It is involved in the production and sale of minerals, metals and chemicals. These industries represent about 70% of its revenues. The rest comes from trading in agricultural products, forestry products and energy. They have operations worldwide, particularly in South Africa, Australia, Ghana, Zambia, Namibia, Botswana, Mozambique, Argentina, Chile, Peru, Tanzania, Zimbabwe, Canada, USA, Indonesia, Malaysia, Brazil, Colombia, Mexico,

10. GlaxoSmithKline PLC - 4.36%

GlaxoSmithKline plc is a pharmaceutical company that specializes in producing generic drugs. It is well-known for its Paxil antidepressant drug. The company is based in the United States, but it also does business in more than 30 countries around the world.

Summary

Throughout this post I have spoke about some of the best dividend yielding UK companies within the stock market. Remember, this list is a tiny fraction of the full space of dividend companies and stocks. Also dividend yields can fluctuate often as share prices fluctuate, so don't expect to see these numbers all the time. But if you're looking for a reliable source of income then these top 10 UK dividend stocks may be worth your while. And remember, there is no guarantee that any of these will pay dividends next year!

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Thanks for Reading 😁

FAQ

What is a dividend yield?

A dividend is the portion of company profits paid to shareholders. Many investors consider such payments as a ‘reward’ for putting their capital at risk by investing in a particular company.

Source: (fool.co.uk)

How did UK dividend yield stocks perform in 2021?

2021 was a good year for stock markets. As economies and consumers emerged from the pandemic, the financial fortunes of many companies continued to recover. Some of the top paying companies made whole on their dividends in 2021. The result was they turned in a decent performance for the year in terms of total return (measured by the price performance of a stock plus the dividend - for example if over a year a £100 stock goes to £110 and also pays £10 dividend that would represent 20% total return).

Source: (freetrade.io)

What FTSE 100 stocks pay the highest dividends?

While dividend yields aren’t the be-all and end-all, stocks with high payouts are still favoured by many investors. So, here are the five FTSE 100 stocks with the highest dividend yields right now according to CMC Markets. Company Sector Dividend yield Rio Tinto Limited Mining 10.48% Persimmon plc House-building 10.29% Imperial Brands plc Tobacco 8.56% M&G plc Investment Management 8.47% Phoenix Group Holdings plc Insurance 7.62%

Source: (fool.co.uk)