UK dividend aristocrats

Bob Davies

August 28, 2023

UK dividend aristocrats

Dividend buying is one of the few ways to invest that has stood the test of time. The idea of getting cash back from investments on a regular schedule is very appealing. In the UK, the idea of Dividend Aristocrats has gained significant traction among income-focused investors.

These are businesses that have a history of increasing their dividends year after year, which shows their financial strength and ability to stay in business.

Defining dividend aristocrats

Dividend Aristocrats are companies that have raised their payouts for a minimum number of years in a row, showing that they are committed to giving back to their shareholders. This shows that the company is able to make stable profits, navigate economic challenges, and keep a good dividend policy.

The exact requirements for a company to be called a Dividend Aristocrat can change, but it usually means that dividends have been going up for at least 25 years.

The significance of dividend aristocrats

Investors are drawn to Dividend Aristocrats for several reasons. First, these companies often possess solid financial fundamentals, including strong cash flows, prudent management, and a competitive advantage within their industry.

Second, the ability to consistently raise dividends showcases management's confidence in the company's future prospects. Third, dividends can provide a steady stream of income, which can be particularly appealing in uncertain market environments.

UK dividend aristocrats of 2023

As of 2023, there are no UK companies that have distinguished themselves as Dividend Aristocrats. "Dividend Aristocrats" traditionally boast decades of consistent dividend increases. Our focus, however, is on UK firms with impressive dividend records and good dividend cover. Even if they don't strictly meet the Aristocrat criteria. These companies symbolise financial strength and commitment to rewarding shareholders.

Diverse dividend standouts

In 2023, several UK companies shine for their dividend resilience:

Company Dividend Yield Dividend Cover Years of Dividend Increases Recent Dividend Cut
M&G 10.3% 0.85 x 4 N/A
BAT 9.2% 1.49 x 5 2017
Legal and General 8.9% 1.65 x 3 2011
Barratt Development 8.1% 1.97 x 2 2020
Intermediate Capital Group 5.74% 0.94 x 13 N/A
National Grid 5.65% 1.43 x 12 2010
Primary Health Properties 7.02% 0.34 x 6 2016
Hargreaves Lansdown 5.10% 1.17 x 7 2015
Drax Group 3.62% 1.04 x 6 2016
Spectris 2.34% 1.45 x 11 2011
Alliance Trust 2.5% 1.00 x 11 2011

In the ever-evolving landscape of investing, the concept of Dividend Aristocrats serves as a beacon of stability and financial strength. While some UK companies mentioned here may not strictly meet the traditional criteria, their commitment to consistent dividend payouts underscores their resilience.

These firms showcase the essence of long-term investment, where a history of steady dividends often reflects robust fundamentals and adaptability in changing times.

As investors seek reliable income streams, these UK companies will continue to stand out for their impressive dividend records in 2023. For those eager to further explore income-focused investment strategies, our blog features an insightful article on UK stocks with high dividend yields.