UK Dividend Aristocrats: the 10 Highest Yielding Aristocrats (August-2021)

Key points:

• The UK Dividend Aristocrats Index is created by S&P and is based on a managed dividends policy of increasing or stable dividends for at least 10 consecutive years.
• Only 40 UK stocks are a member of this list.
• In Europe, it is not common to focus on paying a dividend in a row ( consecutive years) to the shareholders.
• By showing the recent performance of the Dividend Aristocrats, some active dividend growth investors may be able to identify relative bargains.

Last month the UK Dividend Aristocrats gained 3.31%, resulting in a year-to-date total return of 13.16%. As a reference, the S&P United Kingdom gained 0.11% in July.

The annualized total return over 10 years is 5.87% for the UK Dividend Aristocrats. The indicated dividend yield is around 4.33% and the average projected PE is 14.4 for the stocks in this index.

In June 2021, S&P has announced an update to the Monthly Dividend Review (“MDR”) for the UK and high-yield euro dividend aristocrats.

A relevant change is to focus more on the quality of dividend. The Constituent Selection Rule is now:

“Stocks must have increased or maintained stable dividends for at least 10 consecutive years. Stocks cannot have an indicated yield of more than 10% as of the index rebalancing reference date. In addition, new index constituents must have a maximum 100% dividend payout ratio, and existing index constituents must have a non-negative dividend payout ratio”

New UK Dividend aristocrats added to the index in July are:

• Diploma plc
• BAE Systems plc
• Electocomponents plc
• Rio TInto Group plc
• Dechra Pharmaceuticals plc
• Admiral Group
• Primary Health Properties plc

The table below lists all 40 constituents, with indicated dividend yield and lists returns over trailing last month, and year-to-date.

The average dividend yield for all the UK dividend aristocrats is around 4.3% at the moment of writing. Here are the 10 highest UK dividend aristocrats yields:

UK Dividend Aristocrat #10: BAE Systems

Dividend Yield: 4.2%

Increased or maintained dividend: 21 years

UK Dividend Aristocrat #9: Tate &Lyle

Dividend Yield: 4.2%

Increased or maintained dividend: 14 years

Tate & Lyle PLC provides ingredients and solutions to the food, beverage, and other industries. Its products include dairy, beverages, bakery and convenience, sweeteners, and starches. Its segments are Speciality Food Ingredients and Bulk Ingredients.

UK Dividend Aristocrat #8: Ashmore Group

Dividend Yield: 4.3%

Increased or maintained dividend: 10 years

Ashmore Group PLC is engaged in the provision of investment management services. The Company is a fund manager across investment themes, such as external debt, local currencies, corporate debt, blended debt, alternatives and others.

UK Dividend Aristocrat #7: Moneysupermarket.com

Dividend Yield: 4.5%

Increased or maintained dividend: 10 years

UK Dividend Aristocrat #6: IG Group Holdings

Dividend Yield: 4.9%

Increased or maintained dividend: 10 years
United Utilities Group PLC is engaged in utility operations. The company, through its subsidiaries, owns and manages a regulated water and wastewater network.

UK Dividend Aristocrat #5: GlaxoSmithKline Plc

Dividend Yield: 5.6%

Increased or maintained dividend: 10 years

GlaxoSmithKline PLC creates, discovers, develops, manufactures and markets pharmaceutical products including respiratory and antiviral, vaccines, over-the-counter (OTC) medicines and health-related consumer products.

UK Dividend Aristocrat #4: Jupiter Fund Management Plc

Dividend Yield: 6.2%

Increased or maintained dividend: 10 years

Jupiter Fund Management PLC is a fund manager, engaged in managing equity investments on behalf of retail, institutional and private client investors across products, including the UK and offshore mutual funds, segregated mandates, and investment trusts.

UK Dividend Aristocrat #3: Legal & General Group Plc

Dividend Yield: 6.4%

Increased or maintained dividend: 12 years
Legal & General Group PLC sells insurance products and other financial services. It transacts life assurance and long-term savings business, investment management, and general insurance and health business.

UK Dividend Aristocrat #2: Phoenix Group Holdings Plc

Dividend Yield: 6.9%

Increased or maintained dividend: 10 years

Phoenix Group Holdings is a specialist closed life and pension fund consolidator. It manages closed life funds by protecting and enhancing policyholders’ interests.

UK Dividend Aristocrat #1: British American Tobacco Plc (BAT)

Dividend Yield: 8.0%

Increased or maintained dividend: 24 years

British American Tobacco PLC manufactures and sells cigarettes and other tobacco products under the brands Dunhill, Kent, Lucky Strike, Pall Mall, and Rothmans. It also offers Vapour Products, like e-cigarettes, and Tobacco Heating Products.