In this article, we will list the 5 UK Dividend Growth Stocks to Consider. Please visit 9 UK Dividend Growth Stocks to Consider if you would like to see the extended list and the methodology behind it.
5. Coca-Cola Europacific Partners PLC (NASDAQ:CCEP)
5-Year Dividend Growth Rate: 19.19%
Number of Hedge Fund Holders: 35
Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) is a top UK dividend growth stock to consider. On July 9, Wells Fargo reiterated an Overweight rating on Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) and raised the price target by $5 to $115.
The price target hike comes amid expectations that the company is well-positioned to benefit from improving visibility into summer 2026 revenue trends. Additionally, the research firm expects the company to deliver accelerating top-line growth heading into 2027, driven by inflation-justified pricing strategies.
Coca-Cola Europacific Partners has remained resilient despite inflationary pressures, as evidenced by solid profit growth. In contrast, consumer staples and beverage names have seen mixed trading as currency headwinds and input cost inflation weigh on their finances.
The company’s edge has stemmed from leaning into pricing power and premiumization strategies to offset cost pressures. The strategy is expected to continue paying off over the next two years, which explains why it is one of the top UK dividend stocks, with a five-year compound annual growth rate of 19.19%.
Coca-Cola Europacific Partners PLC (NASDAQ:CCEP) is the world’s largest independent Coca-Cola bottler by revenue. They make, move, and sell non-alcoholic ready-to-drink beverages, partnering with The Coca-Cola Company to produce, distribute, and market iconic brands like Coca-Cola, Fanta, Sprite, and Monster Energy across 31 countries in Western Europe and the Asia-Pacific region.
4. HSBC Holdings plc (NYSE:HSBC)
5-Year Dividend Growth Rate: 37.97%
Number of Hedge Fund Holders: 18
HSBC Holdings PLC (NYSE:HSBC) is a top UK dividend growth stock to consider. The company’s dividend has grown at a compound annual growth rate of 37.97% over the past five years. On July 8, Morgan Stanley reiterated an Equal Weight rating on HSBC Holdings PLC (NYSE:HSBC) and raised the price target to 1,527 GBp from 1,463 GBp.
Earlier, on July 7, the financial services company confirmed it is sharpening its focus in Turkey as it continues to target clients with international and cross-border banking needs. The focus also comes as the company continues its strategic review of its retail banking and domestic-focused, smaller- and mid-sized corporate banking operations.
The review is part of an ongoing simplification push as HSBC seeks to increase leadership and market share in areas of clear competitive edge. However, the review does not include the wholesale banking activities of HSBC’s Corporate and Institutional Banking business in Turkey.
HSBC Holdings plc (NYSE:HSBC) is one of the world’s largest banking and financial services organizations, serving over 40 million personal, wealth, and corporate customers across 56 countries and territories. The London-headquartered parent company operates globally through three main business segments: Commercial Banking, Wealth and Personal Banking, and Global Banking and Markets.
3. Lloyds Banking Group PLC (NYSE:LYG)
5-Year Dividend Growth Rate:43.49%
Number of Hedge Fund Holders: 22
Lloyds Banking Group PLC (NYSE:LYG) is a top UK dividend growth stock to consider. On June 30, Morgan Stanley reiterated an overweight rating on the stock and hiked the price target to 135 GBp from 125 GBp. The price target hike comes on the heels of the company’s dividend growing at a compound annual growth rate of 43.49% over the past five years.
The company started the year on a roll, characterized by income growth and cost discipline, which has allowed it to deliver strong profitability. The differentiated business model remains resilient amid economic uncertainties, as depicted by Statutory profit before tax of £2.0 billion for the first three months of the year. Return on tangible equity stood at 17% in the first quarter.
For the full year, Lloyds Banking Group expects net interest income to exceed £14.9 billion with return on tangible equity of more than 16%. Given higher-than-expected expectations, the company expects structural hedge income to grow by more than £1.5 billion to £7 billion by year-end. It is also expected to rise to £8 billion by 2027.
Lloyds Banking Group PLC (NYSE:LYG) is a leading UK-based financial services organization operating through three core divisions: Retail Banking (checking, savings, and mortgages), Insurance, Pensions and Investments, and Commercial Banking.
2. Barclays PLC (NYSE:BCS)
5-Year Dividend Growth Rate: 52.46%
Number of Hedge Fund Holders: 36
Barclays PLC (NYSE:BCS) is a top UK dividend growth stock to consider, boasting a five-year dividend growth rate of 52.46%. On July 2, Morgan Stanley reiterated an Overweight rating on the stock and raised the price target to 610 GBp from 540 GBp.
Earlier, on June 24, Berenberg reiterated its Buy rating on Barclays, noting there is still room for continued outperformance versus the sector. According to the research firm, the company’s near-term profitability is supported by structural hedges, rising volumes, and margins. It also echoed the investment bank’s establishment of a floor for returns as it continues to grow through platform monetization.
Meanwhile, on July 8, Barclays PLC declared a 5.06% stake in Central Asia Metals Plc. The increased stake underscores the investment bank’s confidence in the mining company’s long-term prospects, given its exposure to base metals including copper and zinc.
Barclays PLC (NYSE:BCS) is a major British multinational universal bank headquartered in London. It operates through five core divisions: personal and business banking (Barclays UK), global investment banking, wealth and private banking, corporate lending, and US consumer credit cards.
1. NatWest Group plc (NYSE:NWG)
5-Year Dividend Growth Rate: 57.92%
Number of Hedge Fund Holders: 21
NatWest Group plc (NYSE:NWG) is a top UK dividend growth stock to consider. On July 9, Morgan Stanley analyst Alvaro Serrano reiterated a Hold rating on NatWest Group plc (NYSE:NWG) and hiked the price target to 740 GBp from 700 GBp.
Earlier on June 24, Berenberg reiterated a Buy rating for the banking and financial services company. According to the research firm, the company’s return profile and profitability resilience remain underappreciated. That’s in part because its revenues are driven in the near term by structural hedge. Additionally, growth in loans and deposits is increasingly supporting growth as asset quality remains robust.
NatWest’s long-term outlook is also positive amid expectations of potential increases in policy rates. In the first quarter, it demonstrated resilience, with earnings per share up 15.5% and an attributable profit of £1.4 billion. The company started the year on the right footing, underpinned by healthy customer activity and growth across all three businesses. The solid fundamentals have been the catalyst behind the 57.92% compound annual growth rate in dividends over the past five years.
NatWest Group plc (NYSE:NWG) is a major UK-centered banking and financial services company. It serves over 20 million customers across three core areas: Retail Banking (personal accounts, mortgages, and loans), Commercial Banking (business funding), and Private Banking (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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