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 February 2025, the top-performing dividend-payers included regional bank TBC Bank Group TBCG, non-alcoholic beverages company Coca-Cola Hellenic Bottling Company CCH, and aerospace and defense company Chemring Group CHG.
To find the month’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 capitalization—for companies with a forward dividend yield of at least 1.5%, excluding real estate investment trusts.
The Best-Performing UK Dividend Stocks of February 2025
1. TBC Bank Group TBCG
2. Coca-Cola Hellenic Bottling Company CCH
3. Chemring Group CHG
4. Standard Chartered STAN
5. BAE Systems BA.
6. Ithaca Energy ITH
7. Bakkavor Group BAKK
8. BT Group BT.A
9. Smith & Nephew SN.
10. Bank of Georgia Group BGEO
Best-Performing Dividend Stocks in the UK
Source: Morningstar Direct. Data as of Feb. 28, 2025.
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 month and 18.3% over the past year.
1-Year Performance of UK Dividend Stocks
Source: Morningstar Direct. Data as of Feb. 28, 2025.
The overall UK stock market, as measured by the Morningstar UK Index, has gained 1.6% on the month and 19.8% on the year.
Yields and Metrics for February’s Best-Performing Dividend Stocks
TBC Bank Group
TBC Bank Group rose 28.7% in February and gained 52.1% over the past 12 months. Trading at £42.35 per share, its stock has a forward dividend yield of 5.46%. TBC Bank Group pays investors a trailing 12-month dividend of £2.11 per share. The stock has a quantitative Morningstar Rating of 3 stars.
Coca-Cola Hellenic Bottling Company
Non-alcoholic beverages company Coca-Cola Hellenic Bottling Company rose 19.6% in February and gained 39.5% over the past 12 months. At £33.50 per share, its stock has a forward dividend yield of 2.35% and a trailing 12-month dividend of 81p per share. The stock, which has a narrow economic moat, is moderately overvalued, trading 29% above its fair value estimate of £25.90 per share. It has a Morningstar Rating of 2 stars.
Chemring Group
Aerospace and defense company Chemring Group gained 17.1% in February and rose 9.7% over the past 12 months. The stock’s £4.01 price gives it a forward dividend yield of 1.95%. Chemring Group pays investors a trailing 12-month dividend of 7p per share. The stock has a quantitative Morningstar Rating of 2 stars.
Standard Chartered
Standard Chartered rose 16.2% in February and gained 93.6% over the past 12 months. Trading at £12.69 per share, Standard Chartered stock has a forward dividend yield of 2.3% and a trailing 12-month dividend of 24p per share. The stock, which has no economic moat, is trading near its fair value estimate of £11.70 per share. It has a Morningstar Rating of 3 stars.
BAE Systems
Aerospace and defense company BAE Systems gained 14.9% in February and rose 15.7% over the past 12 months. Trading at £16.11 per share, its forward dividend yield is 2.05%. BAE Systems pays investors a trailing 12-month dividend of 31p per share. The stock, which has a wide economic moat, is trading near its fair value estimate of £15.50 per share. It has a Morningstar Rating of 3 stars.
Ithaca Energy
Oil and gas exploration and production company Ithaca Energy gained 13.9% in February and rose 23.9% over the past 12 months. At £1.40 per share, Ithaca Energy stock has a forward dividend yield of 20.41% and a trailing 12-month dividend of 18p per share. It has a quantitative Morningstar Rating of 5 stars.
Bakkavor Group
Packaged foods company Bakkavor rose 12.7% in February and gained 66.4% over the past 12 months. Trading at £1.54 per share, Bakkavor stock has a forward dividend yield of 4.9% and a trailing 12-month dividend of 7p per share. It has a quantitative Morningstar Rating of 3 stars.
BT Group
Telecom services firm BT rose 12.6% in February and gained 60.7% over the past 12 months. Trading at £1.56 per share, BT stock has a forward dividend yield of 5.18% and pays investors a trailing 12-month dividend of 8p per share. The stock, which has a narrow economic moat, is currently trading at an 18% discount to its fair value estimate of £1.90 per share, leaving it moderately undervalued, leaving it with a Morningstar Rating of 4 stars.
Smith & Nephew
Medical devices company Smith & Nephew gained 11.5% in February and rose 13.4% over the past 12 months. The stock’s £11.72 price gives it a forward dividend yield of 2.5%. Smith & Nephew pays investors a trailing 12-month dividend of 30p per share. With a fair value estimate of £14.64 per share and a narrow economic moat, the stock is moderately undervalued, trading at a 20% discount. It has a Morningstar Rating of 4 stars.
Bank of Georgia Group
Bank of Georgia rose 11.3% in February and gained 17.2% over the past 12 months. At £53.30 per share, Bank of Georgia has a forward dividend yield of 4.35% and a trailing 12-month dividend of £2.45 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 capitalization) 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.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
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. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
