In this article, we will discuss the 9 UK Dividend Growth Stocks to Consider.
The United Kingdom’s equity market has remained resilient for the better part of the year, characterized by strong corporate earnings and a booming M&A environment. While the overall market has rallied by about 5%, value-style equities have outperformed, with the MSCI UK surging 11% in the first half of the year.
Value investing outperformance has been dominant in income funds in the IA UK All Companies sector. The outperformance was primarily driven by inflation stabilization and attractive dividend yields.
“The fund is well diversified from a sector level and in terms of the underlying stream of dividends and is not overly reliant on conventional income sectors such as resources or banks. We believe that this is an extremely attractive offering for investors seeking a healthy and sustainable level of equity income and/or exposure to smaller companies,” RSNR analysts noted
The UK equity market has historically been one of the most generous dividend-paying markets in the world. It boasts a culture of cash returns embedded across sectors such as financials, energy, consumer staples, and real estate. The FTSE 100 index is forecast to pay a record £88 billion in dividends in 2026.
The FTSE 100 consists of many large-cap, cash-rich companies with an impressive record of rewarding passive income-focused investors. The companies offer significantly higher dividend yields than many global peers and boast a solid record of dividend increases.
Our Methodology
To compile a list of 9 UK Dividend Growth Stocks to Consider, we used Finviz and the Yahoo Screener to scan for UK companies listed on US markets. We then focused on companies with a 5% or more annualized dividend growth over the past five years. We also focused on stocks that are popular among elite hedge funds in Q1 2026. Finally, we ranked the stocks based on their five-year dividend growth rate.
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 Dividend Growth Stocks to Consider
9. Pentair plc (NYSE:PNR)
5-Year Dividend Growth Rate: 5.92%
Number of Hedge Fund Holders: 46
Pentair plc (NYSE:PNR) is a top UK dividend growth stock to consider, with a solid dividend growth rate of 5.92% over the past five years. On July 9, Wolfe Research downgraded Pentair (NYSE:PNR) to Peer Perform from Outperform. Similarly, it lowered its year-end fair value estimate to $88 from $111.
The downgrade comes amid concerns about a lack of near-term catalysts. There are also concerns that the company is losing market share in its pool business. The loss of market share has caused Pentair’s pool revenue to lag behind that of major competitors and is expected to continue underperforming. The underperformance is attributed to aggressive 80/20 initiatives that have resulted in volume pressure.
Amid the concerns, Pentair (NYSE:PNR) has achieved a 640-basis-point margin expansion from 2022 to 2025, placing it at the upper end of Wolfe Research’s electrical equipment coverage. The research firm is optimistic that the company will achieve a 50-basis-point margin expansion in the second quarter. However, it is on edge about the company’s ability to achieve a 200-basis-point expansion through 2028 without volume leverage.
Pentair plc (NYSE:PNR) is a global water treatment and fluid management company. It manufactures pumps, filters, valves, and control systems to safely and sustainably move, improve, and enjoy water across residential, commercial, industrial, and agricultural markets.
8. BP p.l.c. (NYSE:BP)
5-Year Dividend Growth Rate: 9.65%
Number of Hedge Fund Holders: 49
BP PLC (NYSE: BP) is a top UK dividend growth stock to consider, having grown its dividend at a 9.65% compound annual growth rate over the past five years. On July 3, BP PLC (NYSE:BP) joined other service station operators in warning store owners not to deal in illegal vapes.
The warning comes as state and city law enforcement officials are pressuring shippers, e-commerce platforms, and payment networks to clamp down on the booming market for illegal vapes worth $9 billion. According to BP, Mastercard has already started issuing compliance violation notices to merchants for processing sales transactions for illegal nicotine delivery system products.
On July 6, it reiterated its commitment to strict capital discipline while also focusing on allocating capital to opportunities with the potential to generate more value. The company agreed to divest its non-operated interest in the Bay du Nord project offshore Newfoundland and Labrador, Canada, to Equinor.
BP p.l.c. (NYSE:BP) is a global integrated energy company. It explores for and produces oil and natural gas, refines petroleum into fuels, and trades energy products worldwide. It also operates extensive retail networks and EV charging stations and invests in renewable energy, such as wind and biofuels.
7. Rentokil Initial PLC (NYSE: RTO)
5-Year Dividend Growth Rate: 10.12%
Number of Hedge Fund Holders: 19
Rentokil Initial PLC (NYSE: RTO) is a top UK dividend growth stock to consider. On July 7, Goldman Sachs upgraded Rentokil Initial PLC (NYSE:RTO) to a Buy from a Neutral. The upgrade came amid expectations of sustained recovery in North American organic growth.
Improving execution in North America since the third quarter of 2025 has strengthened the company’s growth outlook. Consequently, Goldman Sachs expects the North American market to help the company rebuild organic growth through 2027. Additionally, branch expansions, local sales execution, customer retention, and marketing are expected to drive further gains.
Goldman Sachs expects Rentokil Initial to return to mid-single-digit organic growth by 2027. The growth could come as a major pause in Terminix integration, as it continues to reduce operational disruption. Therefore, EBITA margins are expected to increase to 17.1% by 2027, driven by stronger revenue growth and continued cost savings.
The investment bank expects organic growth in North America to be the catalyst that pushes the stock higher. Consequently, it hiked its 12-month price target of the stock to 590 pence from 515 pence.
Rentokil Initial PLC (NYSE: RTO) is a global business services company that provides route-based pest control, commercial hygiene, and workwear services. Operating in over 90 countries—including extensive local fumigation and pest services in Kenya—it protects public health and brand reputations across various industries.
6. Shell Plc (NYSE:SHEL)
5-Year Dividend Growth Rate: 17.28%
Number of Hedge Fund Holders: 45
Shell Plc (NYSE:SHEL) is a top UK dividend growth stock to consider, having grown its dividend at a compound annual growth rate of 17.28% over the past five years. On July 08, Citi lowered its price target of the stock to 3,200 GBp from 3,550 GBp while reiterating a Neutral rating on the shares.
Meanwhile, on July 1, Shell completed the sale of Jiffy Lube International and its subsidiary, Premium Velocity Auto (PVA) LLC, to an affiliate of Monomoy Capital Partners (Monomoy) for $1.3 billion. The sale includes franchise stores owned and operated by PVA. On the other hand, Shell has retained its Pennzoil Quaker State, Rotella, and other Shell Lubricants brands.
Similarly, Shell subsidiary, Shell Offshore, agreed to sell its 50% non-operated working interest in the Na Kika platform and associated fields in the Gulf of America. Talos Energy and Ridgewood Energy subsidiaries are to acquire the assets for a total consideration of $1.7 billion.
Shell Plc (NYSE:SHEL) is a massive global energy company that explores for, extracts, refines, and markets oil and gas. It also trades in liquefied natural gas (LNG) and is heavily involved in the broader energy transition, including lower-carbon solutions and renewables.
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