In this article, we will take a look at some of the best FTSE dividend stocks.
UK stocks have delivered a strong performance recently, with the FTSE 100 crossing the 9,000 mark for the first time and hitting record highs several times this year. The index posted a 7.2% return in the first half of the year, which was its best start since 2021 when it gained 8.9%.
So far this year, an FTSE 100 tracker fund delivered a total return of 14.2%, including dividends but before fees. This is quite appealing given that the year is only halfway through.
The FTSE 100 tends to attract investors during times of global uncertainty because it has many defensive stocks. Sectors such as tobacco, utilities, and telecoms are known for their reliable earnings as they provide essential services that people and businesses continue to need regardless of economic conditions.
Banks and insurers have also remained popular choices because of their attractive dividends. While share prices in these areas may fluctuate, income-focused investors value the stability dividends provide, especially during periods of economic weakness or employment concerns, since dividends can offer a consistent source of cash. Given this, we will take a look at some of the best FTSE dividend stocks to invest in.
Photo by Vitaly Taranov on Unsplash
Our Methodology:
For this article, we scanned Insider Monkey’s database of 1,000 hedge funds as of Q1 2025 to find FTSE stocks that are also traded on US exchanges. Our focus was on companies that have strong dividend policies and consistently distribute dividends to their shareholders. The stocks are ranked in ascending order of hedge funds’ sentiment toward them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Smith & Nephew plc (NYSE:SNN)
Number of Hedge Fund Holders: 10
Smith & Nephew plc (NYSE:SNN), a global medical technology company based in the UK, provides a broad selection of products and services in the medical equipment sector to meet the needs of its customers.
In its Q1 2025 earnings, Smith & Nephew plc (NYSE:SNN) reported a strong start to the year, attributing growth across its portfolio to progress made under its 12-Point Plan for operational improvements. Core platforms, including CORI, EVOS, REGENETEN, and the company’s Negative Pressure Wound Therapy offerings, saw robust double-digit growth during the quarter. The company also continued its rapid pace of innovation, with additional product launches planned for the year. While challenges from the Chinese market persisted, management believes the worst of their impact has likely passed.
Smith & Nephew plc (NYSE:SNN) has a progressive dividend policy and has paid regular dividends to shareholders since 1937. The company currently offers a semi-annual dividend of $0.288 per share for a dividend yield of 2.37%, as of July 25. It is one of the best FTSE dividend stocks to invest in.
9. NatWest Group plc (NYSE:NWG)
Number of Hedge Fund Holders: 17
NatWest Group plc (NYSE:NWG) is an Edinburgh-based company that offers mortgages, loans, credit cards, and related services. The company recently announced its results for the first half of the year, highlighting a £4.2 billion increase in net loans to customers, bringing the total to £336.2 billion. This figure includes £2.2 billion in personal loans and credit card balances acquired from Sainsbury’s Bank as of June 30, 2025.
Within Retail Banking, NatWest Group plc (NYSE:NWG)’s mortgage balances grew by £4.1 billion, while Commercial & Institutional balances rose by £2.0 billion, mainly due to increased lending activity in the Commercial Mid-market segment, particularly to housebuilders and housing associations, as well as within the Corporate & Institutions division.
NatWest Group plc (NYSE:NWG) reported an operating cash flow of £2.5 billion. The company also returned £1.4 billion to shareholders through dividends during this period. Its semi-annual dividend comes in at $0.1543 per share for a dividend yield of 3.92%, as of July 25.
8. HSBC Holdings plc (NYSE:HSBC)
Number of Hedge Fund Holders: 25
HSBC Holdings plc (NYSE:HSBC) is a London-based global banking and financial services organization with deep-rooted ties to East Asia and a widespread international presence. It is among the best FTSE dividend stocks to invest in.
In one of the recent developments, HSBC Holdings plc (NYSE:HSBC) UK has launched its first Wealth Centre in the country, aiming to bring a model that has proven successful in Asia and other regions to the UK market. Located on the seventh and eighth floors of Smithson Tower in St James’s, the centre opened to customers this week after a $5 million investment.
HSBC Holdings plc (NYSE:HSBC) reported strong earnings in the first quarter of 2025, with revenues of $17.6 billion, which beat analysts’ estimates by $1.3 billion. The Board has authorized a first interim dividend of $0.10 per share for 2025. In addition, the company finalized its $2 billion share repurchase program on April 25, which had been announced during the full-year 2024 results. With a dividend yield of 5.08% as of July 25, HSBC is among the best FTSE dividend stocks to invest in.
In April 2025, HSBC Holdings plc (NYSE:HSBC) announced its plans to start a repurchase program of its ordinary shares valued at $0.50 each, with a total buyback limit of up to $3 billion. The goal of this buyback is to reduce the total number of HSBC’s outstanding ordinary shares.
7. British American Tobacco p.l.c. (NYSE:BTI)
Number of Hedge Fund Holders: 27
British American Tobacco p.l.c. (NYSE:BTI) is among the best FTSE dividend stocks. Similar to its industry peers, the company is heavily focused on shifting towards next-generation products. What sets BAT apart is its global reach, offering investors exposure to the worldwide tobacco market rather than being limited to just the US or international markets alone. Its product lineup spans traditional cigarettes, vaporizers, heated tobacco, and smokeless options like chewing tobacco. For those looking to invest in the broader tobacco sector, BAT offers a straightforward, all-in-one entry point through a single stock.
In July, Jefferies began covering British American Tobacco p.l.c. (NYSE:BTI) with a Buy rating, selecting it as their top pick within the tobacco industry. The firm pointed to the company’s growing profitability in its traditional combustibles segment as a key driver supporting its progress in expanding into smoke-free products.
Analysts also highlighted British American Tobacco p.l.c. (NYSE:BTI)’s strong financial position and solid cash returns, while suggesting that there is still potential for margin improvement. From a valuation perspective, the stock was considered appealing, trading at a 35% discount compared to other tobacco firms — a gap Jefferies expects could close over time.
British American Tobacco p.l.c. (NYSE:BTI) has raised its payouts every year since 2018. The company offers a quarterly dividend of $0.7391 per share and has a dividend yield of 5.8%, as recorded on July 25.
6. Unilever PLC (NYSE:UL)
Number of Hedge Fund Holders: 30
The U.K.-based giant Unilever PLC (NYSE:UL) holds a vast portfolio of consumer staples and everyday household brands, spanning everything from cleaning supplies and personal care products to food items. In June, the company reached a deal to purchase the men’s grooming company Dr. Squatch from private equity firm Summit Partners in a transaction valued at $1.5 billion, as per a Financial Times report. Dr. Squatch has built a strong reputation for offering high-quality, natural personal care items, particularly appealing to millennial and Gen Z male consumers. The company is reportedly on course to exceed $400 million in annual revenue.
In the first quarter, Unilever PLC (NYSE:UL) achieved underlying sales growth of 3%, demonstrating the strength of its increasingly premium and innovation-driven portfolio in developed markets. It has implemented strategies in certain emerging markets to accelerate growth in the remainder of the year. Despite ongoing global economic uncertainties, the company remains confident in meeting its full-year targets due to the quality of its innovation program, substantial brand investments, and enhanced competitiveness.
Unilever PLC (NYSE:UL) also grabs investors’ attention due to its strong dividend policy. The company currently offers a quarterly dividend of $0.5151 per share and has a dividend yield of 3.21%, as of July 25.
5. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 39
Diageo plc (NYSE:DEO) is among the best FTSE dividend stocks. The company owns well-known brands such as Johnnie Walker, Tanqueray, Ketel One, Don Julio, and many other premium spirits. It is also the producer of Guinness, the famous Irish stout. With a portfolio of over 200 brands, Diageo sells its products in 180 countries worldwide.
Although Diageo plc (NYSE:DEO)’s offerings cover a wide range of price points, the company has recently concentrated on acquiring and developing premium brands. This strategy allows the company to raise prices more easily, as it does not rely on competing through lower costs, and aligns with the growing consumer preference for higher-quality spirits.
Diageo plc (NYSE:DEO) is a solid dividend payer, having raised its payouts for 25 consecutive years. The company pays an interim dividend of $1.62 per share for a dividend yield of 3.87%, as of July 25.
4. Pentair plc (NYSE:PNR)
Number of Hedge Fund Holders: 53
Pentair plc (NYSE:PNR) is an American company focused on water treatment solutions. While its headquarters are in the United States, the company is legally registered in Ireland and has its tax residence in the United Kingdom.
Piper Sandler recently identified Pentair plc (NYSE:PNR) as a leading contender in the artificial intelligence surge. The firm started covering the software company with an Overweight rating and set a price target of $175, indicating a potential upside of around 13% from Palantir’s closing price on Thursday.
Pentair plc (NYSE:PNR) recently reported its earnings for the second quarter of 2025 and demonstrated a strong cash position. The company’s operating cash flow was $607 million, and its free cash flow was $596 million. It also paid $82.4 million to shareholders through dividends. In addition, PNR has been rewarding its shareholders with growing dividends for the past 49 years.
Currently, it pays a quarterly dividend of $0.25 per share and has a dividend yield of 0.97%, as of July 25.
3. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 56
AstraZeneca PLC (NASDAQ:AZN) is well-positioned to handle upcoming patent expirations, thanks to a robust pipeline of drugs in development. By the close of the first quarter, the company had gained approval or label updates for roughly 13 treatments. Two of its most notable experimental drugs, AZD5004 and AZD6234, show potential in the weight management space. In total, the company is advancing nearly 200 research programs across its development pipeline.
AstraZeneca PLC (NASDAQ:AZN) recently announced plans to invest $50 billion in the US by 2030. This initiative is expected to generate tens of thousands of direct and indirect jobs nationwide. A key part of the investment includes the development of a new multi-billion-dollar manufacturing site in the US, which will focus on producing drug substances for its weight management and metabolic treatments—such as oral GLP-1, baxdrostat, oral PCSK9, and combination small molecule therapies. This commitment comes on top of the $3.5 billion investment the company revealed in November 2024.
AstraZeneca PLC (NASDAQ:AZN) is a solid dividend payer, as it has paid uninterrupted dividends to shareholders for the past 32 years. The company offers an interim dividend of $1.03 per share and has a dividend yield of 2.13%, as of July 25.
2. Willis Towers Watson Public Limited Company (NASDAQ:WTW)
Number of Hedge Fund Holders: 57
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is a London-based insurance company that offers commercial insurance, brokerage services, and strategic risk investment solutions. The company recently said its marine insurance arm, Willis, has introduced a new $200 million facility to protect cargo owners worldwide against geopolitical risks. Willis created ‘Undercover’ in collaboration with the specialist insurer Markel Group. This facility provides a distinctive solution for transferring risks related to cargo, land-based war, terrorism, political unrest, and asset confiscation.
In its first quarter earnings, Willis Towers Watson Public Limited Company (NASDAQ:WTW) reported revenue of $2.22 billion, which fell by over 5% from the same period last year. The company posted adjusted diluted earnings per share of $3.13 for the quarter, roughly in line with the same period last year. Operating margin reached 19.4%, marking an improvement of 740 basis points compared to the previous year.
Willis Towers Watson Public Limited Company (NASDAQ:WTW) is one of the best FTSE dividend stocks, as the company has raised its payouts for ten consecutive years. Currently, the company offers a quarterly dividend of $0.92 per share and has a dividend yield of 1.19%, as of July 25.
1. Linde plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 75
Linde plc (NASDAQ:LIN) has created a range of technologies aimed at efficiently compressing and safely refueling hydrogen, along with solutions that help reduce the carbon footprint of hydrogen through carbon capture and storage methods.
In June 2025, Linde plc (NASDAQ:LIN) entered into a long-term deal to provide industrial gases to a low-carbon ammonia plant in Louisiana. The upcoming $400 million on-site facility will enhance Linde’s existing hydrogen and syngas network in the area.
In the first quarter of 2025, Linde plc (NASDAQ:LIN) reported revenue of $8.1 billion, up 1% from the same period last year. The company generated $2.2 billion in operating cash flow, marking an 11% increase compared to the previous year. After accounting for $1.27 billion in capital expenditures, its free cash flow stood at $891 million. Over the course of the quarter, it returned $1.808 billion to shareholders through dividends and share buybacks, after offsetting any new stock issuances.
Linde plc (NASDAQ:LIN) currently offers a quarterly dividend of $1.50 per share, having raised it by 8% in February this year. Through this increase, the company stretched its dividend growth streak to 32 years, which makes it one of the best FTSE dividend stocks. LIN offers a dividend yield of 1.27%, as of July 25.
While we acknowledge the potential of LIN 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 LIN and that has 100x upside potential, check out our report about this cheapest AI stock.
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