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 April 2024, the top-performing dividend-payers included metals and mining firm Anglo American (AAL), capital markets company Plus500 (PLUS), and oil and gas exploration and production company Diversified Energy (DEC).
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 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 April 2024
1. Anglo American (AAL)
2. Plus500 (PLUS)
3. Diversified Energy (DEC)
4. GlobalData (DATA)
5. OSB Group (OSB)
6. NatWest (NWG)
7. PZ Cussons (PZC)
8. AstraZeneca (AZN)
9. Morgan Advanced Materials (MGAM)
10. HSBC (HSBA)
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, was roughly flat over the past month, but has risen 1.6% over the past year.
The overall UK stock market, as measured by the Morningstar UK Index, has gained 2.6% on the month and 7.3% on the year.
Yields and Metrics for April's Best-Performing Dividend Stocks
Anglo American
Metals and mining firm Anglo American rose 35% in April and gained 10.9% over the past 12 months. Trading at £26.34 per share, its stock has a forward dividend yield of 2.91%. Anglo American pays investors an annual dividend of £1.29 per share. The stock, which has no economic moat, is currently trading at a 27% premium to its fair value estimate of £20.80 per share, leaving it with a Morningstar Rating of 2 stars.
Plus500
Capital markets company Plus500 rose 19.8% in April and gained 37.8% over the past 12 months. At £21.62 per share, its stock has a forward dividend yield of 2.99% and an annual dividend of 63p per share. It has a quantitative Morningstar Rating of 3 stars.
Diversified Energy
Oil and gas exploration and production company Diversified Energy gained 18.8% in April and fell 26% over the past 12 months. The stock's £11.26 price gives it a forward dividend yield of 8.21%. Diversified Energy pays investors an annual dividend of £3.49 per share. The stock has a quantitative Morningstar Rating of 3 stars.
GlobalData
Consulting firm GlobalData rose 16.5% in April and gained 22.3% over the past 12 months. Trading at £2.12 per share, GlobalData stock has a forward dividend yield of 2.17% and an annual dividend of 4p per share. It has a quantitative Morningstar Rating of 3 stars.
OSB Group
Mortgage finance firm OSB Group gained 14.6% in April and fell 10.9% over the past 12 months. Trading at £4.11 per share, its forward dividend yield is 7.79%. OSB pays investors 32p per share annually. It has a quantitative Morningstar Rating of 3 stars.
NatWest
Regional bank NatWest Group gained 14.3% in April and rose 22.3% over the past 12 months. At £3.04 per share, NatWest Group stock has a forward dividend yield of 5.6% and an annual dividend of 17p per share. The stock, which has no economic moat, is trading near its fair value estimate of £2.80 per share. It has a Morningstar Rating of 3 stars.
PZ Cussons
Household and personal products company PZ Cussons rose 13.7% in April and lost 46.5% over the past 12 months. Trading at £1.02 per share, PZ Cussons stock has a forward dividend yield of 5.13% and an annual dividend of 6p per share. It has a quantitative Morningstar Rating of 3 stars.
AstraZeneca
Drug manufacturer AstraZeneca rose 13% in April and gained 4.6% over the past 12 months. Trading at £120.62 per share, AstraZeneca stock has a forward dividend yield of 1.89% and pays investors an annual dividend of £2.89 per share. The stock, which has a wide economic moat, is currently trading near its fair value estimate of £124 per share, leaving it with a Morningstar Rating of 3 stars.
Morgan Advanced Materials
Specialty industrial machinery firm Morgan Advanced Materials gained 12.5% in April and rose 8.5% over the past 12 months. The stock's £3.14 price gives it a forward dividend yield of 3.82%. Morgan Advanced Materials pays investors an annual dividend of 12p per share. The stock has a quantitative Morningstar Rating of 4 stars.
HSBC
HSBC rose 12.4% in April and gained 29.7% over the past 12 months. At £6.96 per share, HSBC has a forward dividend yield of 7% and an annual dividend of 62p per share. The stock, which has no economic moat, is moderately undervalued, trading 20% below its fair value estimate of £8.72 per share. It has a Morningstar Rating of 4 stars. You can read more about HSBC's recent dividend hike and CEO exit in this article.
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.
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.
Companies that are not formally covered by a Morningstar analyst have quantitative ratings. These companies are statistically matched to analyst-rated companies, allowing our models to calculate a quantitative moat, fair value, and uncertainty rating.
This article was compiled by Bella Albrecht, edited by Lauren Solberg, and reviewed by Sunniva Kolostyak.
As part of our mission to put more information into the hands of investors, this article was compiled from Morningstar’s data and independent research using automation technology. The original article was written by Morningstar reporters and editors. This updated version was reviewed by an editor.
