Dividend-paying stocks that combine healthy balance sheets with hefty yields can provide investors with steady incomes, cushion against market downturns, and grow investments at a healthy clip.
In the second quarter of 2024, the top-performing dividend-payers included asset management firm Hargreaves Lansdown (HL.), capital markets company CMC Markets UK (CMCX), and non-alcoholic beverages company Britvic (BVIC).
To find the quarter's 10 best-performing income-focused stocks, we screened the Morningstar UK Index – which measures the performance of the UK's broad regional markets, targeting the top 97% of stocks by market capitalisation – for companies with a forward dividend yield of at least 1.5%, excluding real estate investment trusts.
The Best-Performing UK Dividend Stocks of Q2 2024
1. Hargreaves Lansdown (HL.)
2. CMC Markets (CMCX)
3. Britvic (BVIC)
4. Anglo American (AAL)
5. BT (BT.A)
6. AJ Bell (AJB)
7. IntegraFin (IHP)
8. Plus500 (PLUS)
9. QinetiQ (QQ.)
10. Keller Group (KLR)
How Have Dividend Stocks Performed?
The Morningstar UK Dividend Yield Focus Index, which tracks the performance of high-quality, dividend-paying stocks listed in the UK, rose 2.8% over the past quarter and 10.0% over the past year.
The overall UK stock market, as measured by the Morningstar UK Index, has gained 3.7% on the quarter and 13.0% on the year.
Yields and Metrics for Q2's Best-Performing Dividend Stocks
Hargreaves Lansdown
Asset management firm Hargreaves Lansdown rose 53.8% in the second quarter and gained 43.9% over the past 12 months. Trading at £11.32 per share, its stock has a forward dividend yield of 3.71%. Hargreaves Lansdown pays investors a trailing 12-month dividend of 40p per share. The stock has a quantitative Morningstar Rating of 3 stars.
CMC Markets UK
Capital markets company CMC Markets rose 50.3% in the second quarter and gained 115.8% over the past 12 months. At £3.27 per share, its stock has a forward dividend yield of 2.54% and a trailing 12-month dividend of 7p per share. It has a quantitative Morningstar Rating of 3 stars.
Britvic
Non-alcoholic beverages company Britvic gained 44.8% in the second quarter and rose 41.7% over the past 12 months. The stock's £11.81 price gives it a forward dividend yield of 2.72%. Britvic pays investors a trailing 12-month dividend of 31p per share. The stock has a quantitative Morningstar Rating of 3 stars.
Anglo American
Metals and mining firm Anglo American rose 28.2% in the second quarter and gained 15.5% over the past 12 months. Trading at £25.02 per share, Anglo American stock has a forward dividend yield of 3.07% and a trailing 12-month dividend of £1.01 per share. The stock, which has no economic moat, is moderately overvalued, trading 17% above its fair value estimate of £21.40 per share. It has a Morningstar Rating of 2 stars.
BT
Telecom services firm BT gained 28.0% in the second quarter and rose 21.0% over the past 12 months. Trading at £1.40 per share, its forward dividend yield is 5.7%. BT pays investors a trailing 12-month dividend of 8p per share. The stock, which has a narrow economic moat, is trading at a 30% discount to its fair value estimate of £2 per share, leaving it moderately undervalued. It has a Morningstar Rating of 4 stars.
AJ Bell
Asset management firm AJ Bell gained 26.9% in the second quarter and rose 21.8% over the past 12 months. At £3.79 per share, AJ Bell stock has a forward dividend yield of 3.03% and a trailing 12-month dividend of 11p per share. It has a quantitative Morningstar Rating of 3 stars.
IntegraFin
Asset management firm IntegraFin rose 26.0% in the second quarter and gained 50.7% over the past 12 months. Trading at £3.47 per share, IntegraFin stock has a forward dividend yield of 2.94% and a trailing 12-month dividend of 10p per share. It has a quantitative Morningstar Rating of 3 stars.
Plus500
Capital markets company Plus500 rose 25.5% in the second quarter and gained 63.7% over the past 12 months. Trading at £22.66 per share, Plus500 stock has a forward dividend yield of 2.85% and pays investors a trailing 12-month dividend of 49p per share. The stock has a quantitative Morningstar Rating of 3 stars.
QinetiQ
Aerospace and defence company QinetiQ gained 21.4% in the second quarter and rose 27.5% over the past 12 months. The stock's £4.43 price gives it a forward dividend yield of 1.86%. QinetiQ pays investors a trailing 12-month dividend of 8p per share. The stock has a quantitative Morningstar Rating of 3 stars.
Keller Group
Engineering and construction company Keller rose 20.2% in the second quarter and gained 81.9% over the past 12 months. At £12.28 per share, Keller has a forward dividend yield of 3.68% and a trailing 12-month dividend of 38p per share. It has a quantitative Morningstar Rating of 3 stars.
What is the Morningstar UK Index?
The Morningstar UK Index measures the performance of the UK's broad regional markets, targeting the top 97% of stocks by market capitalisation. The index does not incorporate environmental, social, or governance criteria.
What is the Morningstar UK Dividend Yield Focus Index?
The Morningstar UK Dividend Yield Focus Index captures the performance of a portfolio of high-quality, dividend-paying securities.
It's a subset of the Morningstar UK Index (which represents 97% of the equity market capitalisation) that includes only stocks that pay dividends. The stocks are screened for economic moat and financial strength compared to others in their sector. Real estate investment trusts are excluded.
The 25 highest-yielding stocks are included in the index, weighted by the dollar value of the dividends. See the full rulebook here.
The Best Dividend Stock Leaders: More Ideas to Consider
Investors who would like to uncover more top-performing or cheap dividend stocks to research further can do the following:
• Review the full list of Dividend stocks included in the Morningstar UK Dividend Yield Focus index. Those dividend stocks with Morningstar Ratings of 4 or 5 stars are undervalued, according to our metrics.
• Read our monthly analysis of the latest dividend moves among the top FTSE 100 dividend payers.
• Use our Morningstar Screener tool to find the best dividend stocks according to your specific criteria. You can search for stocks based on their dividend yields, valuation measures such as price/earnings, and more.
• Use Morningstar Portfolio Manager to build a watchlist of the best dividend stocks and create a view that allows you to easily follow the valuations, ratings, and dividend yields of the stocks in your list.
• When it comes to buying stocks, it’s more than just dividends. Read here how valuations and competitive advantages—known as economic moats—matter when it comes to a stock’s potential for outperformance.
• Watch this video to learn how Morningstar uses the star rating, moat rating and other metrics to evaluate stocks.
Companies that are not formally covered by a Morningstar analyst are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative star rating.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
This article was generated with the help of automation and reviewed by Morningstar editors.
