3 UK Dividend Stocks With Up To 8.3% Yield To Enhance Your Portfolio

The United Kingdom’s FTSE 100 index has recently experienced a downturn, influenced by weak trade data from China and its impact on global markets. In such volatile conditions, dividend stocks can offer a measure of stability and income potential, making them an appealing option for investors looking to enhance their portfolios amidst the current economic uncertainties.

Click here to see the full list of 61 stocks from our Top UK Dividend Stocks screener.

Here we highlight a subset of our preferred stocks from the screener.

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Burberry Group plc, along with its subsidiaries, is engaged in the manufacturing, retailing, and wholesaling of luxury goods under the Burberry brand with a market capitalization of approximately £2.80 billion.

Operations: Burberry Group plc generates its revenue primarily from Retail/Wholesale activities amounting to £2.91 billion and Licensing which contributes £63 million.

Dividend Yield: 7.8%

Burberry Group offers a high dividend yield of 7.77%, placing it in the top 25% of UK dividend payers, with dividends covered by earnings (payout ratio: 82.5%) and cash flows (cash payout ratio: 73%). Despite this, its dividend history is volatile and unreliable, having experienced significant fluctuations over the past decade. Recently, Burberry was removed from the FTSE 100 Index and added to the FTSE 250 Index.

Simply Wall St Dividend Rating: ★★★★★☆

Overview: Castings P.L.C. is involved in iron casting and machining operations across several regions, including the UK, Europe, and the Americas, with a market cap of £132.11 million.

Operations: Castings P.L.C. generates its revenue primarily from Foundry Operations (£250.98 million) and Machining Operations (£37.65 million).

Dividend Yield: 8.3%

Castings PLC offers a dividend yield of 8.33%, ranking in the top 25% of UK dividend payers, with dividends well covered by earnings (payout ratio: 47.6%) but not by cash flows (cash payout ratio: 100.4%). The company’s dividends have been stable and reliable over the past decade, though sustainability is questioned due to insufficient free cash flow coverage. Recent board changes include Stephen Harrison’s appointment as an independent Non-Executive Director.

Story continues

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Rio Tinto Group is involved in the exploration, mining, and processing of mineral resources globally and has a market capitalization of approximately £85.23 billion.

Operations: Rio Tinto Group’s revenue is primarily derived from its Iron Ore segment at $31.86 billion, followed by Aluminium at $12.51 billion, Copper at $7.60 billion, and Minerals at $5.78 billion.

Dividend Yield: 6.7%

Rio Tinto Group offers a dividend yield of 6.68%, placing it in the top 25% of UK dividend payers, although its dividends are not well covered by free cash flows (cash payout ratio: 98.9%). Despite earnings covering dividends with a payout ratio of 65.6%, dividend sustainability is questionable due to volatility over the past decade. Recent developments include potential acquisitions in lithium and copper sectors, aligning with strategic growth in battery metals amidst stable production guidance for key commodities.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LSE:BRBY LSE:CGS and LSE:RIO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com