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 October 2024, the top-performing dividend-payers included engineering and construction company Morgan Sindall Group MGNS, packaging and containers company DS Smith SMDS, and oil and gas exploration and production company Serica Energy SQZ.
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 October 2024
1. Morgan Sindall MGNS
2. DS Smith SMDS
3. Serica Energy SQZ
4. Standard Chartered STAN
5. Bank of Georgia BGEO
6. Pearson PSON
7. Games Workshop GAW
8. Energean ENOG
9. Cairn Homes CRN
10. St. James’s Place STJ
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, fell 3.8% over the past month, but has risen 15.4% 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 lost 1.6% on the month, but has risen 16.1% on the year.
Yields and Metrics for October’s Best-Performing Dividend Stocks
Morgan Sindall Group
Engineering and construction company Morgan Sindall rose 22.9% in October and gained 105.6% over the past 12 months. Trading at £37.50 per share, its stock has a forward dividend yield of 3.19%. Morgan Sindall Group pays investors a trailing 12-month dividend of £1.14 per share. The stock has a quantitative Morningstar Rating of 2 stars.
DS Smith
Packaging and containers company DS Smith rose 18.1% in October and gained 97.6% over the past 12 months. At £5.39 per share, its stock has a forward dividend yield of 3.34% and a trailing 12-month dividend of 18p per share. It has a quantitative Morningstar Rating of 3 stars.
Serica Energy
Oil and gas exploration and production company Serica Energy gained 13.9% in October and fell 28.7% over the past 12 months. The stock’s £1.35 price gives it a forward dividend yield of 17.04%. Serica Energy pays investors a trailing 12-month dividend of 22p per share. The stock has a quantitative Morningstar Rating of 3 stars.
Standard Chartered
Standard Chartered rose 13.5% in October and gained 46.7% over the past 12 months. Trading at £9.14 per share, Standard Chartered stock has a forward dividend yield of 2.57% and a trailing 12-month dividend of 24p per share. The stock, which has no economic moat, is trading near its fair value estimate of £9.95 per share. It has a Morningstar Rating of 3 stars.
Bank of Georgia
Bank of Georgia gained 13.2% in October and rose 31.9% over the past 12 months. Trading at £42.60 per share, its forward dividend yield is 5.45%. Bank of Georgia Group pays investors a trailing 12-month dividend of £2.36 per share. It has a quantitative Morningstar Rating of 4 stars.
Pearson
Publishing company Pearson gained 12.4% in October and rose 22.2% over the past 12 months. At £11.58 per share, Pearson stock has a forward dividend yield of 1.99% and a trailing 12-month dividend of 23p per share. It has a quantitative Morningstar Rating of 3 stars.
Games Workshop
Leisure company Games Workshop rose 12.0% in October and gained 25.3% over the past 12 months. Trading at £120.40 per share, Games Workshop stock has a forward dividend yield of 3.41% and a trailing 12-month dividend of £4.20 per share. It has a quantitative Morningstar Rating of 1 star.
Energean
Oil and gas exploration and production company Energean rose 11.5% in October and gained 29.0% over the past 12 months. Trading at £9.74 per share, Energean stock has a forward dividend yield of 9.21% and pays investors a trailing 12-month dividend of 94p per share. The stock has a quantitative Morningstar Rating of 4 stars.
Cairn Homes
Residential construction company Cairn Homes gained 11.3% in October and rose 92.3% over the past 12 months. The stock’s £1.82 price gives it a forward dividend yield of 3.5%. Cairn Homes pays investors a trailing 12-month dividend of 5p per share. The stock has a quantitative Morningstar Rating of 3 stars.
St. James’s Place
Asset manager St. James’s Place rose 10.8% in October and gained 29.3% over the past 12 months. At £8.18 per share, St. James’s Place has a forward dividend yield of 1.71% and a trailing 12-month dividend of 24p 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.
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