7 Cheap UK Dividend Shares to Buy in September 2021

Here are some cheap UK shares that offer a great mix of value and dividends

Last Updated August 30th 2021
4 Min Read

Cheap UK Dividend Shares

With the FTSE 100 index of shares yielding a healthy average dividend per stock of 3.6%, it is easy to see how passive income can be generated.

When scouting for decent dividend-yielding stocks, investors ideally want to look for shares that combine value for money and a respectable dividend pay-out.

Here we take you through some top-performing UK dividend shares to consider buying this September:

7 Cheap UK Dividend Shares to Buy in September 2021:

1. Persimmon

Persimmon is a British housebuilder with numerous new developments in progress and already launched across the UK. 

As one of the UK's most successful housebuilders, Persimmon has reaped the benefits of the spiralling increase in UK house prices over recent decades and has generally remained profitable. With a current dividend yield of 8.13% the stock already looks attractive to value investors. 

However, trading at a P/E ratio of just 11.69 means the stock is also cheap to buy, too.

2. BP

For investors who can tolerate a little risk, BP currently looks very cheap by historical standards. 

Whilst the past 12 months have been brutal for the energy sector, BP’s low price combined with a dividend yield of 5.30% make it a tempting proposition. 

The decline in sale of petrol cars will eventually put a massive dent in BP’s business model, but analysts have turned more positive on the stock of late.  The electric car revolution has moved slower than many anticipated, and so BP may well have many more years of profits and dividend payments ahead.

3. IG Group 

The past year has witnessed an explosion in the popularity of online trading. Several UK-based publicly listed companies have been able to cash in on this trend. IG Group provides a high-functioning and low-fee platform where investors can trade everything from stocks, to bonds, to CFDs, and indexes. 

With a dividend yield of 4.65% and a P/E ratio of 9.31, IG Group is a cheap UK dividend stock with great medium to long term potential.

Invest IG Group

4. Reckitt Benckiser

To start with, Reckitt offers a dividend yield of just 3.15%, but bear with me. Needless to say this towers over the rates available on cash ISAs from high street banks, but there are good reasons to think profit and so future dividends are on the way up for Reckitt. 

As the group owning a literally endless list of household name brands including Finish, Dettol, Air Wick, and Durex, Reckitt has had a blockbuster year with everyone lockdown at home. 

Reckitt also opened a new state-of-the-art R & D lab last year meaning the next generation of innovative household products can be expected to be provided by the group as well.

5. Polymetal International

Talk of a coming commodities super-cycle may have subsided, but there can be no doubt that gold and other precious metals remain an excellent bet over the long term.

Obviously, there are dividends attached to holding gold, but by buying shares in gold miners like Polymetal you can get the best of bother worlds.  Polymetal has a dividend yield of 6.52% right now and the firm is set to continue increasing their global mining operations with new acquisitions.

Invest Polymetal

6. Lloyds Banking Group

A traditional favourite of those seeking UK shares paying high dividends, Lloyds looks like an absolute bargain right now.  The Covid-depressed share price and paltry dividend for 2020 shouldn’t deflect attention from the fact that the share was regularly yielding 4-6% payments in the prior years. 

Lloyds have the resilience to bounce back from the current lockdown generated malaise and have publicly stated they aim to restart dividend payments as soon as possible.

7. Tesco

Finally few can be in any doubt that the big supermarkets have had a stunning year.  With consumers looking to them for everything from essential supplies to luxury items, the oligopoly of big UK supermarkets have certainly cemented their place at the heart of the consumer economy. 

Tesco profits have allowed the payment of a dividend yield of 4.64% recently, and the news that the brand will re-focus towards its core markets has been met warmly by investors.

Don’t undervalue cheap dividend yields!

The stocks above have been selected as they all offer strong dividends at a relatively cheap asking price.  This does not of course mean they are risk-free, but all the companies listed above have a level of stability to go along with their low price and high dividends. 

Whilst not as exciting as tech growth stocks, if you can find a high dividend at a low price then you may well have found something than will provide a great addition to a balanced portfolio.

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