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 2024, the top-performing dividend-payers included regional bank Bank of Georgia (BGEO), scientific and technical instruments firm Renishaw (RSW), and specialty insurance company Beazley Group (BEZ).
To find the month's 10 best-performing income-focused stocks, we screened the Morningstar UK GR GBP 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%, excluding real estate investment trusts.
The Best-Performing UK Dividend Stocks of February 2024
1. Bank of Georgia Group (BGEO)
2. Renishaw (RSW)
3. Beazley Group (BEZ)
4. Barclays (BARC)
5. Fever-Tree (FEVR)
6. DS Smith (SMDS)
7. InterContinental Hotels Group (IHG)
8. Standard Chartered (STAN)
9. Diversified Energy Co PLC (DEC)
10. Conduit Holdings Ltd (CRE)
How Have Dividend Stocks Performed Over the Past Year?
In the 12 months leading up to February 29, the Morningstar UK Dividend Yield Focus GR GBP index, which tracks the performance of high-quality, dividend-paying stocks listed in the UK, rose 2.3%.
The dividend yield focus index outperformed the overall UK stock market, which gained 0.2% over the 12-month period as measured by the Morningstar UK GR GBP index.
Yields and Metrics for the Best-Performing Income Players
Bank of Georgia Group
Regional bank Bank of Georgia rose 24.1% in February to end the last 12 months up 78.4%. Trading at £47.10 per share, its stock has a forward dividend yield of 5.69%. Bank of Georgia pays investors an annual dividend of £8.87 per share. The no-moat stock is currently trading near its quantitative fair value estimate of £52.03 per share.
Renishaw
Scientific and technical instruments firm Renishaw rose 23% in February, leaving it up 9.8% over the past year. At £43.08 per share, its stock has a forward dividend yield of 1.77% and an annual dividend of 76p per share. The narrow-moat stock is trading near its quantitative fair value estimate of £47.76 per share.
Beazley
Specialty insurance company Beazley gained 19.7% in February to end the last 12 months down 2.6%. The stock's £6.52 price gives it a forward dividend yield of 4.05%. Beazley pays investors an annual dividend of 17p per share. With a quantitative fair value estimate of £6.69 per share, the narrow-moat stock is fairly valued.
Barclays
Diversified bank Barclays rose 14.4% in February, leaving it down 1.3% over the past year. Trading at £1.64 per share, Barclays stock has a forward dividend yield of 4.86% and an annual dividend of 8p per share. The no-moat stock is moderately undervalued, trading 22% below its fair value estimate of £2.10 per share.
Fever-Tree
Non-alcoholic beverage company Fever-Tree gained 14.4% in February to end the last 12 months up 10%. Trading at £11.55 per share, its forward dividend yield is 1.42%. Fever-Tree pays investors 16p per share annually. The narrow-moat stock is trading at a 13% discount to its quantitative fair value estimate of £13.32 per share, leaving it moderately undervalued.
DS Smith
Packaging and containers firm DS Smith gained 14% in February, leaving it up 0.8% over the past year. At £3.22 per share, DS Smithstock has a forward dividend yield of 5.59% and an annual dividend of 18p per share. The no-moat stock is moderately undervalued, trading 12% below its quantitative fair value estimate of £3.67 per share.
InterContinental Hotels
Lodging company InterContinental Hotels rose 11.7% in February to end the last 12 months up 51.5%. Trading at £83.80 per share, InterContinental stock has a forward dividend yield of 1.45% and an annual dividend of £1.43 per share. The wide-moat stock is moderately overvalued, trading 27% above its fair value estimate of £66 per share.
Standard Chartered
Diversified bank Standard Chartered rose 11.5% in February, leaving it down 14.3% over the past year. Trading at £6.68 per share, Standard Chartered stock has a forward dividend yield of 3.23% and pays investors an annual dividend of 20p per share. The no-moat stock is currently trading at a 20% discount to its fair value estimate of £8.30 per share, leaving it moderately undervalued.
Diversified Energy
Oil and gas exploration and production company Diversified Energy gained 9.6% in February to end the last 12 months down 38.4%. The stock's £9.36 price gives it a forward dividend yield of 29.55%. Diversified Energy pays investors an annual dividend of £3.40 per share. With a quantitative fair value estimate of £15.99 per share, the narrow-moat stock is fairly valued.
Conduit Holdings
Reinsurance company Conduit rose 9.2% in February, leaving it up 11.1% over the past year. At £5.20 per share, Conduit has a forward dividend yield of 5.5% and an annual dividend of 36p per share. The no-moat stock is trading near its quantitative fair value estimate of £5.69 per share.
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.
