7 UK Dividend Stocks To Buy Now That Offer An Attractive Income Stream

Last Updated July 23rd 2021
23 Min Read

These top 7 UK Dividend stocks promise an Attractice Income Stream

Best UK Dividend Stocks to Buy in 2021

Are you a beginner into stock trading and looking to add diversity along with some regular income into your portfolio of stocks? Or are you an investor who wants to add the best UK dividend stocks to your collection but not sure as to which dividend stocks are the best stocks to choose? Take a look as we have picked 7 UK dividend stocks to buy now that offer an attractive income stream. 

 

Top 7 UK Dividend Stocks to Buy Right Now

Before we take a closer look at the best UK dividend stocks in 2021, here are our top 7 picks:

1. PayPoint PLC

2. Legal & General Group PLC

3. GlaxoSmithKline

4. Unilever PLC

5. Moneysupermarket.com Group PLC

6. Tate & Lyle PLC

7. Wm Morrisons Supermarkets

 

You can buy all of these top uk dividend stocks, as well as many others, at eToro and pay 0% fees!

UK Dividend Stocks With an Attractive Income Stream 

For many investors, making a good profit is what most investors aim for when they look to start investing within the market. But what many investors overlook and maybe do not realise is that dividend stocks can offer you great advantages, including great returns and are also deemed to be quicker and safer bets than growth stocks. 

Dividend stocks offer you as an investor the best of both worlds. To be a part of some of the best well-known exciting companies on the planet with room for potential growth, along with the safety net of not potentially losing a lot of money along the way. 

Having said that, Growth stocks are also good investments as they will give you good returns, mainly from the stocks share price. However, growth stocks are longer investments when it comes to making money and they are deemed more riskier than dividend stocks. But are equally of course good investments. 

So if you are a patient investor who wants to be a part of both worlds, then we recommend you have a diverse collection of both. 

If you are looking to establish which are the best growth stocks to invest in for 2021, be sure to read Top 10 British Shares to Consider in 2021.

But if a regular passive income stream is what you are looking for in your trading journey, let's take a look at 7 of the top UK dividend stocks to buy now that can offer you attractive returns. 

TOP 7 UK Dividend Stocks to Buy Now That Offer an Attractive Income Stream

Here you have our list of 7 UK dividend stocks that look set to be the most attractive stocks on the British market today. Let's take a closer look into how well these stocks could perform over the coming years. Keep an eye out for them! They may do exceptionally well next year.

 

1. PayPoint PLC (PAY.L) 

Dividend Yield: 6.01%

The first British dividend stock to come on the list is PayPoint plc. 

This English company which was founded in 1996 and is headquartered in Welwyn Garden City, also operates in Romania along with the UK. The company is designed to help individuals pay bills in a quick, simple way all with a few clicks of a button. 

Not only has the company grown and expected to grow further over the future years, the company also pays a reliable dividend to its shareholders, with its previous dividend being paid on 29th December 2020 of 7.80p per share and the company's next payment due to be paid on March 8th 2021.  

This UK stock is looking like it is continuing and setting up nicely for the year ahead from the companies recent trading report issued on 21st January 2021. 

The company reported that although the underlying group net revenue from continuing operations was down 10.8% to £3.0 million from £27.5 million in 2020, along with UK retail services net revenue declining by 1.4% to £10.6 million, the company has still shown some strong results. 

Although the UK retail services revenue was down, it still encountered increases in card payment transactions along with the new business sector winning in digital payments, major clients renewals enhanced the company's retailer proposition to increase footfall. 

The company's plan in terms of growth expansion is looking to continue as the company announced that the acquisition for both Handepay and Merchant Rentals is looking to be completed in early 2021 subject to approval. Along with the completed acquisition of i-movo at the end of November 2020, which will create more exciting opportunities for the brand. 

Noting that this company also operates in Romania, the company has confirmed that they are pursuing to dispose of the Romanian side of the business, which will enable the company to have free significant profits to be able to continue the growth of the UK business and develop the movement of the UK strategy. 

What are analysts' thoughts and forecasts for this stock moving forward? 

It was confirmed although behind on their revenue income, the company still grew by 3.7% over the past year. 

Moving forward, 4 of 5 the city analysts have given this stock a consensus ‘Buy’ rating with an average twelve-month price target being 880.60p along with range price targets between 540p at its lowest and 1,263p at its highest. 

2. Legal & General Group PLC (LGEN.L)

Dividend Yield: 6.97% 

The insurance company Legal & General is a reliable and stable divided UK stock that you should consider buying into. 

To give you a breakdown of what LGEN offers, the company offers various insurance products along with offering their services all across the world, operating in various segments including Retirement, Investment Management, Capital, and Insurance. 

In 2020, the company paid a dividend of 4.93p per share which was paid on the 24th September 2020. 

Following the uncertainty that 2020 has shown to us all, this insurance group has done well over the past year, and looking ahead the insurance firm has been given a growth earnings forecast of 9.24% per year. 

Having constantly delivered double-digit earnings over the past decade, the insurance company stated in its recent figures in the companies November 2020 report that 2020 is a ‘Pause’ year, as the whole business has been aiming to hit 2019’s operating profit of £2.3 billion, in light of recent events. 

But the company's ambitions moving forward across all five strong business areas, are predicted to expand even further globally. From offering new products along with solutions to their put in place strategies. 

What do analysts believe this stock can bring in the future? 

If you follow the latest investment news, this British stock has just been given a revised Zacks Rank consensus rating to a ‘Hold’. In the bigger picture, this actually means that now could be a good time to jump in on this stock. 

From 12 city analysts, this stock has been more favoured and has been given a ‘Buy’ rating by 5 analysts, 4 giving the stock a ‘Hold’ and 3 ‘Sell’ ratings. 

Analysts have also given this stock a twelve-month price target of 245.82p along with a low price target of 165.00p and a high price target of 344.00p. 

Although this stock has had a reversed rating, this dividend stock still offers a lot of potential including two big factors in terms of growth prospect and its dividend yield. Making this one of the 7 UK dividend stocks to buy.


3. GlaxoSmithKline PLC (GSK.L) 

Dividend Yield: 5.51% 

The British multinational pharmaceutical company is one UK dividend stock, who arguably you have heard or seen a lot of this stock over the past couple of months, as it deserves to be given the attention. 

As 2020 has been taken over by the Coronavirus infection, all companies within this industry have been company’s to look out for, but GSK has a little more to offer than others.

As one of the largest pharmaceutical companies within the world today, the company has just recently seen it's new invention ‘Cabenuva’, under the brand ViiV become FDA approved which is the first long-lasting drug for the treatment of HIV-1 infection within adults.

Along with the company delivering the first Malaria vaccine, RTS,S in 2014.

The pharmaceutical company has many avenue adventures and has even teamed up in 2018 with the leading organisation Pfizer combining their consumer health divisions.  

In the company's recent financial report, it is clear to see that the pharmaceutical segment is the key opponent within the global brand, as its revenue soars above the other segments at £4.2 billion -3% in comparison its Vaccine segment at £2.0 billion - 9% and its consumer segment at £2.4 billion +2%. 

Some impressive results are shown by the healthcare brand in 2020. 

The company's last dividend was paid to shareholders on 14th January 2021 at 19.00p per share. 

What do analysts think of this pharmaceutical dividend stock moving forward?

Looking at the fact that the company's earnings have grown by 39.7% over the past year, there is no wonder that the company has been forecast to archive further growth going into 2021. 

Earnings have been forecast to grow by 4.76% per year, with 19 Wall Street analysts giving the stock a conscious ‘Hold’ rating given by 10 analysts, with 7 analysts giving the stock a ‘Buy’ and 2 giving the stock a ‘Sell’ rating. 

A twelve-month price target has been given of 1,732.38P along with a low price target of 1,300.00P and a high price target of 1,732.38P. 

Along with the company paying a reliable dividend of 5.51%. 

In light of what the world is currently going through, and naturally, we will be in need of more vaccines and medicines in the future, makes this UK dividend stock one to buy into, but to also keep and hold for a very long time, the perfect retirement investment. 

4. Unilever PLC (ULVR.L)

Dividend Yield: 3.4%

Okay, Unilever Plc the British multinational consumer goods company, notably probably holds the smallest dividend yield on this list of 7 UK dividends to buy. However, this stock has made the list for numerous reasons and one reason, of course, is its reliable dividend even during tough times. 

Unilever (ULVR) is a British consumer goods company who is home to some of the world's well-known brands under its belt including Dove, Hellman’s and Lipton to name just three of the fifteen companies that bring in over one billion euros each alone. This is not to mention that the leading consumer brand has over 400 brands under its wing in total. 

Within the consumer staples sector, this stock holds an impressive collection of brands which are in demand by consumers across the globe, and not just from within the UK. 

In 2020, in light of the Brexit agreement the company made the decision to merge Unilever N.V. with Unilever plc which was announced on November 30th 2020 confirming that it has now one class of shares. 

The company have also showcased their support to health workers and across the nation in light of the Covid-19 pandemic, as they have helped by contributing over EUR 100 million donations in soaps, hand-sanitiser, bleach and food. 

In the company's October 2020 report, the company reported an underlying sales growth of 4.4% vs 2019 and a 9 nine-month USG of 1.4%. 

The company is looking to change their outlook and are looking to become more eco-friendly, as they have confirmed their plans to increase their annual sales in plant-based meat and dairy alternatives to EUR 200 million between 5-7 years. Along with looking to roll out the brands CleanFuture strategy as they seek to eliminate fossil fuel carbon from cleaning products by 2030. 

As the company announced that their focus remains on ‘growth, delivering absolute profit and free cash flow’. 

What does the future look like for the company?

Unilever has been given an earning growth forecast of 5.63% per year, along with its reliable dividend of 3.4%. 

According to 10 Wall Street and city analysts covering this stock, it has been given a conscious ‘Hold’ rating with 5 analysts given the stock a ‘Buy’, 2 ‘Hold’ ratings and 3 ‘Sell’ ratings. A twelve-month price target of 4,822.00 has been forecast for the stock, with a low price target being 3,800P and a high price target of 5,500P

5. Moneysupermarket.com Group PLC (MONY.L)

Dividend Yield: 4.33%

The UK comparison website is arguably one of the most well known, along with one the nations chosen comparison websites on the market today.

Specialising within the financial services which include allowing individuals to compare the best deals for insurance, home services, mortgages, travel insurance, credit cards and more. The firm has been a success across the nation with individuals always on the search for a good or better deal, especially in harder times.

Finance guru Martin Lewis, one of the nations go-to men for cutting and saving costs, was the owner of Money Saving Expert until he sold the company to Moneysupermarket in 2012. 

The company’s last dividend was paid on 11th September 2020 at 3.10p per share.

What does the future look like for this stock?

The future outlook for this stock is continuing to look positive. The company sits in a comfortable financial health position, along with growth prospects and its debt covered well.

Analysts have given the stock an earnings forecast of 12.84% per year, along with a consensus ‘Hold’ rating given by 6 out of 11 city analysts, with 5 giving the stock a ‘Buy’. 

This stock is looking like a good buy, considering all of the uncertainty surrounding these unprecedented and challenging times, individuals are going to look for the best deals across all avenues. And when times become more normal, it’s human nature to get a good deal.

The company currently has a dividend yield of 4.33%. 

6. Tate & Lyle PLC (TATE.L)

The FTSE 250’s contender Tate & Lyle Plc comes as a reliable dividend stock to look to buy within 2021. 

The global food and beverage supplier offers nutritive sweeteners along with health and wellness food ingredients, to name two categories of products. 

In recent news, the brand has confirmed its growth plans for the company as the brand has expanded its line of tapioca-based starches. This is looking to improve and deliver superior products through an improved process. 

Along with adding to the company’s portfolio, the brand has also announced a CFO who will come into power in May 2021. 

With their aim to generate a better life, within the company’s 2020 financial report the company’s sales were up to £2,882 million, its profit before tax up to £296 million year-over-year, with adjusted free tax flow showing a huge difference to £247 million up from £212 million in 2019 and lastly a return on capital at 17.5%. 

What does the stocks forecast look like for the future? 

Looking ahead, this stock is looking firm on delivering the best and healthy food ingredients and beverages across the globe as the demand is apparent. 

As earnings grew 6.9% over the past year, a growth earnings forecast has been set at 4.84% per year. 

Out of 9 analysts, 5 have given the stock a consensus ‘Hold’ rating, with 3 giving the stock a ‘Buy’ and 1 ‘Sell’ rating. The average twelve-month price target is 706.67P with a low price target being 630 and its high price target being 770P. 

With lockdown measurements currently in place with the UK, and more individuals opting for a healthier lifestyle, this dividend stock is looking perfect as a long-term investment. 

7. Wm Morrisons Supermarkets (MRW.L)

Dividend Yield: 4.1%

The last UK dividend stock to come on the last of the top 7 stocks that can offer an attractive income stream is Wm Morrisons Supermarket (MRW). 

The British supermarket brand is becoming a strong contender when it comes to paying out a dividend, as the company paid a special dividend of £4.00 on January 25th 2021. 

MRW is set to pay its next dividend on 24th June 2021. 

This special dividend comes from the impressive revenue results that the leading supermarket brand has brought in over the year, and more so in the company’s later months and it’s good Christmas festive sales. 

Alongside, Morrison’s supermarket announced that they will increase their employees’ national minimum wage to £10 per hour, to which MRW is the only leading supermarket that pays its staff this wage with most sticking to national minimum wage. 

Morrison’s have been seeking new ways to reach their customers within these challenging and hard times brought on by Covid-19, as their online store has been operating well along with the family hampers which are available to order through Amazon Prime Subscription. 

In recent news, Morrisons supermarkets have confirmed that they are showing their support even further for food banks, as they deliver a £5 million commitment to keep food banks stocked up within these uncertain and challenging times. 

What do analysts think of this stock looking to the future? 

3 of the 6 analysts have given the stock a ‘Buy’ rating, with 2 giving the stock a ‘Hold’ and 1 giving the stock a ‘Sell’ rating. 

The average twelve-month price target for the supermarket brand is 194P with a low price target of 175P and a high price target of 221P. 

Along with an earnings forecast set to grow by 16.27% per year. 

This supermarket brand is one UK dividend stock that has been a contender over the past 10 years with its dividend and is looking to continue further into the future. 

UK Dividend Stocks - Summary

And there you have our chosen 7 UK dividend stocks to look to consider, that could give you an attractive income stream through the year and set for a good long-term investment. 

These top 7 UK dividend stocks have not only shown good results over a challenging year in 2020 as they have continued to grow, but they have also evidenced a strong performing background for many years and are still continuing to grow as we move forward into the future.  

To conclude these stocks show growth, safety and an attractive dividend yield, three key elements to look at when looking to invest in dividend stocks. 

Having said that, although these stocks have shown impressive results in the past, it is wise to not go on a stock's past when looking to invest. Although it does give you an indication of how the stock can and has performed, there is still an element of risk that needs to be thought of before investing. 

How To Invest in UK Dividend Stocks?

Now we have looked at 7 of the best UK dividend stocks, now let's take a look at how to start your journey into investing in them and getting you a part of the action.

Investing in stocks today is not only exciting and very popular, it is also straightforward, simple and easy. As long as you have the right guidance and the right mindset, this will be the case throughout your trading journey. 

On that note, it is wise to not take ‘tip-offs’ or take ‘word of mouth’ tips by individuals, unless you have done your own research and have a firm understanding that this stock is something that you wish to be a part of. 

Firstly, your first step is to look at obtaining a broker to invest in your chosen stocks. 

There are many trading brokers to choose from, as I am sure if you have done some research you will see there are ample amounts of trading platforms along with individual brokers to choose from.

But one huge beneficial piece of advice is to choose your broker wisely and make sure the broker or trading platform holds the correct licences in order to trade. 

The regulated licenses can be found on the online trading platforms website along with brokers licences being available or on request. 

Once you have found your chosen broker or online trading platform, then realistically you are ready to go.

Although if you are looking to have a long, successful pathway into stock trading you have to put the time and effort into taking the time to research your chosen stock or stocks that are of interest.

If you're looking for a trusted online trading platform to start your investing journey, we highly recommend the award-winning online trading platform, eToro.

The trusted online trading platform eToro is the perfect platform if you are a beginner investor just starting out within your journey. With its simple layout and helpful guidance, you will soon be making your trading journey into a reality. Along with the additional benefit of having a lot of educational material from courses to reading material, with online tutor classes for you to be able to get all your doubts answered by professionals.

Etoro is now home to over 19 million clients worldwide, with access to over 16 international markets for you to be able to trade in, which also include these 7 UK dividend stocks along with much more.  All with the additional benefit of offering zero-commission fees when you are investing in your chosen stocks. 

To open an account with eToro all you have to do is to follow the straight forward steps on the company's homepage. Within minutes you will find that you have a trading account along with a chosen broker, with access to a virtual online platform to be able to learn and practise with $100,000 worth of virtual funds for you to learn, practice and create an investor's portfolio. 

For a smooth, simple and easy transaction into the stock trading world, eToro is your trusted platform that can make your trading endeavours run smoothly and come true. 

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Key Points: 

If you remember anything from the Top 7 UK Dividend Stocks to Buy Now, make it these key points.

  • 7 UK dividend stocks to buy into today offer an attractive income stream that you can add to your additional financial income. 
  • Dividend stocks are stocks which offer you financial payouts known as Dividends.
  • A Dividend is often paid every quarter (3 months) to their shareholders, which come from a company's retained earnings. 
  • Dividend stocks are deemed to be safer and known to be slightly more reliable as opposed to growth stocks. 
  • Dividend stocks offer great diversity to your portfolio if you look to add growth stocks to the mix too.
  • Dividend stocks are fantastic long-term investments. 
  • Although dividend stocks carry a lot of advantages, they do come with their own risk elements, which is advised to conduct additional research before investing in your chosen stocks.  
  • Choose a trusted broker and trading platform to join you on your journey into stock trading. 
  • Always invest within your means. 

Please Note: Past performance is not an indication of future performance. The value of investments can go down as well as up. Any opinions, news, research, analyses, prices, or other information contained on this website are provided as general market commentary, and do not constitute investment advice. Trading Education shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information provided.

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