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 first quarter of 2025, the top-performing dividend-payers included precious metals and mining company Fresnillo FRES, telecom services firm Airtel Africa AAF, and oil and gas exploration and production company Ithaca Energy ITH.
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 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 Q1 2025
1. Fresnillo FRES
2. Airtel Africa PLC Ordinary Shares AAF
3. Ithaca Energy ITH
4. BAE Systems BA.
5. TBC Bank Group TBCG
6. Prudential UK PRU
7. Endeavour Mining EDV
8. Coca-Cola HBC CCH
9. Bakkavor Group BAKK
10. Genus GNS
Best-Performing Dividend Stocks in the UK
Source: Morningstar Direct. Data as of March 31, 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 7.2% over the past quarter and 14.6% over the past year.
1-Year Performance of UK Dividend Stocks
Source: Morningstar Direct. Data as of March 31, 2025.
The overall UK stock market, as measured by the Morningstar UK Index, has gained 5.2% on the quarter and 11.8% on the year.
Yields and Metrics for Q1’s Best-Performing Dividend Stocks
Fresnillo
Precious metals and mining company Fresnillo rose 50.6% in the first quarter and gained 101.0% over the past 12 months. Trading at £9.36 per share, its stock has a forward dividend yield of 2.75%. Fresnillo pays investors a trailing 12-month dividend of 4p per share. The stock has a quantitative Morningstar Rating of 2 stars.
Airtel Africa PLC Ordinary Shares
Telecom services firm Airtel Africa rose 45.8% in the first quarter and gained 61.1% over the past 12 months. At £1.66 per share, its stock has a forward dividend yield of 2.91% and a trailing 12-month dividend of 5p per share. It has a quantitative Morningstar Rating of 3 stars.
Ithaca Energy
Oil and gas exploration and production company Ithaca Energy gained 44.6% in the first quarter and rose 32.8% over the past 12 months. The stock’s £1.60 price gives it a forward dividend yield of 17.16%. Ithaca Energy pays investors a trailing 12-month dividend of 18p per share. The stock has a quantitative Morningstar Rating of 4 stars.
BAE Systems
Aerospace and defense company BAE Systems rose 35.8% in the first quarter and gained 17.9% over the past 12 months. Trading at £15.60 per share, BAE Systems stock has a forward dividend yield of 2.12% and 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.
TBC Bank Group
TBC Bank Group gained 32.4% in the first quarter and rose 34.7% over the past 12 months. Trading at £41.30 per share, its forward dividend yield is 5.6%. TBC Bank pays investors a trailing 12-month dividend of £2.11 per share. It has a quantitative Morningstar Rating of 3 stars.
Prudential UK
Life insurance company Prudential UK gained 31.7% in the first quarter and rose 13.6% over the past 12 months. At £8.26 per share, Prudential UK stock has a forward dividend yield of 2.15% and a trailing 12-month dividend of 17p per share. The stock, which has no economic moat, is moderately undervalued, trading 31% below its fair value estimate of £12 per share. It has a Morningstar Rating of 4 stars.
Endeavour Mining
Gold company Endeavour Mining rose 30.7% in the first quarter and gained 17.7% over the past 12 months. Trading at £18.19 per share, Endeavour Mining stock has a forward dividend yield of 4.84% and a trailing 12-month dividend of 65p per share. It has a quantitative Morningstar Rating of 3 stars.
Coca-Cola HBC
Non-alcoholic beverages company Coca-Cola HBC, formerly known as Coca-Cola Hellenic Bottling Company, rose 28.3% in the first quarter and gained 43.2% over the past 12 months. Trading at £35.04 per share, Coca-Cola HBC stock has a forward dividend yield of 2.24% and pays investors a trailing 12-month dividend of 77p per share. The stock, which has a narrow economic moat, is currently trading at a 35% premium to its fair value estimate of £25.90 per share, leaving it moderately overvalued, leaving it with a Morningstar Rating of 2 stars.
Bakkavor Group
Packaged foods company Bakkavor Group gained 21.9% in the first quarter and rose 71.8% over the past 12 months. The stock’s £1.78 price gives it a forward dividend yield of 4.49%. Bakkavor pays investors a trailing 12-month dividend of 8p per share. The stock has a quantitative Morningstar Rating of 3 stars.
Genus
Biotechnology firm Genus rose 20.9% in the first quarter and gained 7.4% over the past 12 months. At £18.64 per share, Genus has a forward dividend yield of 1.72% and a trailing 12-month dividend of 32p per share. It has a quantitative Morningstar Rating of 4 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.
