In this article, we will discuss the 10 UK Stocks with the Highest Dividends.
United Kingdom equities have shown wild swings in 2026 on the Iran war, pushing inflation high and rattling investors over the prospects of low interest rates. The overall equity market has underperformed its US counterparts, as political uncertainty in the UK has also weighed on investor sentiment.
The country’s main stock index, the FTSE 100 index, is up by about 5% year to date, underperforming the 9% gain for the S&P 500. Amid the underperformance, the UK equity market has seen a surge in merger and acquisition activity as private equity and corporate buyers take advantage of discounted valuations to acquire British companies.
Likewise, the underperformance has resulted in low valuations that investors are also taking advantage of. UK equities also stand out for their attractive dividend yields. With overall earnings projected to increase by 11% annually in the coming years, UK dividend stocks stand to offer reliable passive income on the side.
While the UK inflation has risen significantly to about 3.5%, the highest level in over a year, higher energy costs, water bills, and council tax have come into play. Likewise, investors are having to contend with an environment marked by global economic uncertainties. This all makes investing in dividend stocks an important way to generate income.
Some of the best UK Stocks with the highest dividends offer high payout ratios and trade at a discount relative to their fair value.
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Our Methodology
To compile a list of 10 UK stocks with the highest dividends, we used a Finviz screener to identify UK stocks listed in the US. Then we trimmed the list using Google Finance to select stocks with dividend yields above 4% as of June 16, 2026. We also detailed the number of hedge funds that hold stakes in them in Q1 2026. Finally, we ranked the stocks in ascending order based on their dividend yield.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
UK Stocks with the Highest Dividends
10. National Grid plc (NYSE:NGG)
Dividend Yield: 4.01%
Number of Hedge Fund Holders: 30
National Grid plc (NYSE:NGG) is one of the UK’s highest-dividend stocks. The company has paid dividends for over two decades and pays twice a year. The stock boasts of a quarterly dividend of $0.81 a share and a dividend yield of 4.01%.
On June 4, National Grid plc (NYSE:NGG) announced the scrip dividend reference price for its 2025/26 final dividend. The reference price for ordinary shareholders was set at 1,197.70 pence, while American Depositary Receipt holders received a scrip ADR reference price of $80.5453.
The company had earlier declared a final dividend of 32.14 pence per ordinary share and $2.1738 per ADR, with a record date of May 29. Shareholders must make their scrip election by June 18, while ADR holders have until June 15. The final dividend payment date is scheduled for July 23.
National Grid noted that a $0.02 per ADR fee applies to cash distributions but not to ADRs received through the scrip dividend. The scheme allows investors to opt for new shares instead of cash, with full terms available via the company’s website and Equiniti.
National Grid plc (NYSE:NGG) is an investor-owned energy company that owns and operates the high-voltage electricity transmission systems and local gas/electricity distribution networks across parts of the United States (primarily New York and Massachusetts) and the United Kingdom (specifically England and Wales).
9. HSBC Holdings plc (NYSE:HSBC)
Dividend Yield: 4.08%
Number of Hedge Fund Holders: 18
HSBC Holdings plc (NYSE:HSBC) is one of the UK’s highest-dividend stocks. The company has successfully paid dividends for 27 consecutive years. While the stock pays a quarterly dividend of $0.94 a share, it offers a dividend yield of 4.08%.
On May 5, the company’s board approved an interim dividend payment of $0.10 per ordinary share. The dividend is to be paid on June 26 to shareholders of record as of May 15, 2026.
Amid its push for dividend payments, HSBC Holdings plc (NYSE:HSBC) on June 17 announced a multi‑year partnership with Alphabet’s Google Cloud, aimed at strengthening the British bank’s artificial intelligence capabilities, Reuters reported. The financial services company is looking to integrate AI across its products and services globally. The company plans to enable more than 200 new AI HSBC use cases.
The integration will also help accelerate innovation across areas of hyper-personalized advice and financial crime risk management. HSBC is to work with Google Cloud and Google DeepMind engineering teams on new AI-powered tools and programs. It will also gain access to the latest agentic AI capabilities, including Gemini models.
HSBC Holdings plc (NYSE:HSBC) is one of the world’s largest global banking and financial services organizations, serving over 40 million personal, wealth, and corporate customers across 50+ countries and territories. It operates as a universal bank, providing a wide array of financial products and services from day-to-day retail banking to international trade finance.
8. Diageo plc (NYSE:DEO)
Dividend Yield: 4.13%
Number of Hedge Fund Holders: 35
Diageo PLC (NYSE:DEO) is one of the UK’s highest-dividend stocks. The company has maintained a long-standing track record of paying dividends for over three decades, with a quarterly dividend of $0.83 a share and a dividend yield of about 4.13%.
On June 5, Diageo PLC (NYSE:DEO)’s Indian business unit, United Spirits, announced plans to close a manufacturing unit in Venkateshwara Nagara, India, by the end of August. It builds on United Spirits’ shutdown of the Hyderabad manufacturing unit in Nacharam last year.
The facility the company is closing generated $63.1 million in revenues in the financial year 2025 to 2026, accounting for 2% of the company’s revenue. The shutdown is part of a broader multiyear supply chain agility program approved in 2023. It is also in response to rising operational costs and changing market dynamics.
Similarly, United Spirits has reached an agreement to sell a production site in the eastern state of Odisha to local business Cupid Breweries & Distilleries. The sale comes as the Diageo unit continues to reshape its manufacturing network in India.
Diageo plc (NYSE:DEO) is a British multinational company that manufactures, distributes, and markets a massive global portfolio of premium alcoholic beverages, including spirits, beer, and non-alcoholic alternatives. The company’s operations encompass global distilling, brewing, and packaging to serve markets in over 180 countries.
7. BP p.l.c. (NYSE:BP)
Dividend Yield: 4.81%
Number of Hedge Fund Holders: 49
BP p.l.c. (NYSE:BP) It is one of the UK’s highest-dividend stocks, having paid dividends for over 50 years. The company currently pays a quarterly dividend of $0.4992/ADS and has a dividend yield of 4.81%, as of June 16.
On June 11, RBC Capital reiterated an Outperform rating on BP Plc. (NYSE:BP). The research firm remains confident about the company’s long-term outlook, citing a more supportive macro environment. The firm expects the stock to outperform its peers, even as investors seek clarity on the medium-term growth ambitions and the balance-sheet end goal.
Meanwhile, Reuters reports that BP Plc has opened talks about a potential sale of stakes in two of its Gulf of Mexico projects. The company has been eyeing the sale of minority stakes in the Kaskida and Tiber projects for more than a year, transactions expected to unlock billions of dollars for the company. It joins a string of oil and gas companies that are increasingly selling minority stakes to free up capital invested in them.
BP p.l.c. (NYSE:BP) is a global integrated energy company. It operates across the entire energy value chain, from exploring for and producing oil and gas to trading energy and delivering finished products like fuels, lubricants, and convenience items to consumers worldwide.
6. NatWest Group plc (NYSE:NWG)
Dividend Yield: 5.22%
Number of Hedge Fund Holders: 21
NatWest Group plc (NYSE:NWG) is one of the UK’s highest-dividend stocks. The company pays a quarterly dividend of about $0.22 a share, translating to a dividend yield of 5.22%. Over the past five years, its dividend payout has increased by about 58%.
Earlier on May 27, NatWest Group entered into a strategic partnership with Cleareye.ai, a specialist in artificial intelligence solutions. The company is looking to modernize its trade operations and enhance its financial crisis management capabilities. The partnership also aligns with a wider transformation strategy focused on delivering superior customer service.
Consequently, Natwest Group is poised to implement ClearTrade, an AI-powered platform to automate the extraction and classification of critical data from complex trade documents. The solution will also streamline document workflows while enabling the company to perform robust compliance and Trade-Based Money Laundering checks.
According to Michael Gilham, Trade Product Lead, Commercial and Institutional at NatWest, the partnership will help customers trade in foreign markets more quickly and with greater certainty. It will also help the company deliver personalized and productive service.
NatWest Group plc (NYSE:NWG) is a UK-focused banking and financial services company that serves over 20 million customers. Operating through brands like NatWest, Royal Bank of Scotland (RBS), Ulster Bank NI, and Coutts, the group provides retail banking, commercial and institutional services, and wealth management.
While we acknowledge the potential of NWG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NWG and that has 100x upside potential, check out our report about the cheapest AI stock.
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