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 November 2024, the top-performing dividend-payers included insurance firm Direct Line DLG, software firm Sage SGE, and International Airlines Group IAG.
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 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 November 2024
1. Direct Line Insurance Group DLG
2. Sage Group SGE
3. International Airlines Group IAG
4. Games Workshop GAW
5. DCC DCC
6. TP ICAP TCAP
7. Vesuvius VSVS
8. Smiths Group SMIN
9. BT Group BT.A
10. FirstGroup FGP
Best-Performing Dividend Stocks in the UK
Source: Morningstar Direct.
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 3.4% over the past month and 15.9% over the past year.
1-Year Performance for Dividend Stocks
Source: Morningstar Direct.
The overall UK stock market, as measured by the Morningstar UK Index, has gained 2.8% on the month and 16.1% on the year.
Yields and Metrics for November’s Best-Performing Dividend Stocks
Direct Line Insurance Group
Direct Line has been the subject of takeover bids recently, which sent its share price soaring by 42.9% in November. It has gained 27.7% over the past 12 months. Read Morningstar’s analyst Henry Heathfield’s take on the bid from Aviva AV..
Trading at £2.35 per share, its stock has a forward dividend yield of 2.56%. Direct Line pays investors a trailing 12-month dividend of 4p per share. The stock, which has no economic moat, is currently trading near its recently raised fair value estimate of £2.20 per share, leaving it with a Morningstar Rating of 3 stars.
Sage Group
Software application firm Sage rose 35.3% in November and gained 17.8% over the past 12 months. At £13.12 per share, its stock has a forward dividend yield of 1.56% and a trailing 12-month dividend of 19p per share. The stock, which has a narrow economic moat, is moderately overvalued, trading 31% above its fair value estimate of £10 per share. Sage has a Morningstar Rating of 2 stars.
International Airlines Group
IAG gained 23.7% in November and rose 72.0% over the past 12 months. The stock’s £2.61 price gives it a forward dividend yield of 1.94%. IAG pays investors a trailing 12-month dividend of 3p per share. With a fair value estimate of £2.24 per share and no economic moat, the stock is fairly valued and has a Morningstar Rating of 3 stars.
Games Workshop
Games Workshop rose 18.1% in November and gained 35.8% over the past 12 months. The company revealed better-than-expected results last month and could now enter the FTSE 100. Trading at £141.30 per share, Games Workshop stock has a forward dividend yield of 2.9% and a trailing 12-month dividend of £4.20 per share. It has a quantitative Morningstar Rating of 1 star.
DCC
Oil and gas company DCC gained 18.1% in November and rose 10.9% over the past 12 months. Trading at £57.25 per share, its forward dividend yield is 3.49%. DCC pays investors a trailing 12-month dividend of £1.97 per share. It has a quantitative Morningstar Rating of 3 stars.
TP ICAP
Capital markets company TP ICAP gained 16.9% in November and rose 49.7% over the past 12 months. At £2.62 per share, TP ICAP stock has a forward dividend yield of 5.64% and a trailing 12-month dividend of 15p per share. It has a quantitative Morningstar Rating of 3 stars.
Vesuvius
Steel firm Vesuvius rose 16.8% in November and gained 2.6% over the past 12 months. Trading at £4.17 per share, Vesuvius stock has a forward dividend yield of 5.58% and a trailing 12-month dividend of 23p per share. It has a quantitative Morningstar Rating of 5 stars.
Smiths Group
Industrial machinery firm Smiths rose 15.8% in November and gained 10.1% over the past 12 months. Trading at £17.71 per share, Smiths stock has a forward dividend yield of 2.47% and pays investors a trailing 12-month dividend of 42p per share. The stock has a quantitative Morningstar Rating of 3 stars.
BT Group
Telecom giant BT gained 15.2% in November and rose 36.1% over the past 12 months. The stock’s £1.59 price gives it a forward dividend yield of 5.08%. BT pays investors a trailing 12-month dividend of 8p per share. With a fair value estimate of £1.90 per share and a narrow economic moat, the stock is moderately undervalued, trading at a 16% discount. It has a Morningstar Rating of 4 stars.
FirstGroup
Passenger transportation company FirstGroup rose 14.9% in November and lost 1.9% over the past 12 months. At £1.51 per share, FirstGroup has a forward dividend yield of 3.76% and a trailing 12-month dividend of 6p per share. It has a quantitative Morningstar Rating of 3 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 capitalization. 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.
