Top dividend-paying stocks in the UK
Published: April 28, 2025 / Market insights
Investing in stocks that pay dividends can be a great way to make passive income and build wealth over time. Stocks that pay dividends give investors a steady stream of income, which makes them a good choice, especially when the economy is uncertain.
There are a number of companies in the UK that are known for their steady and attractive income payouts. In this piece, we'll look at some of the best dividend-paying stocks in the UK, taking their past performance, dividend yields, and the investment landscape as a whole into account.
After a turbulent 2022, global markets, including the FTSE 100, have largely stabilized through 2024 and into 2025. Dividend investors are seeing more consistent opportunities again. However, it remains important to choose companies with a strong ability to maintain payouts even if conditions worsen. A dividend cover of 2.0x or higher is ideal because it suggests that a company earns twice as much profit as it pays out in dividends.
This allows companies to continue investing in their business while sustaining dividends even during challenging periods. More information about it is in our article, What is dividend cover?
UK companies with high dividend yields and decent covers Vodafone still captures attention with its high dividend yield, although investors should remain cautious due to its relatively weak dividend cover. As we move through 2025, other strong contenders like M&G, Phoenix Group, and Glencore continue to offer attractive income opportunities.
However, it's prudent for investors to exercise caution when forecast yields exceed 10%. Past experiences with companies such as Vodafone, Shell, Evraz, Persimmon, and Centrica — initially touted for their high yields — have shown less favourable outcomes. Careful consideration of a company's dividend cover becomes imperative to reduce risks. Consequently, certain stocks have been thoughtfully excluded from this list.
When charting your dividend investment journey, it's vital to balance the allure of high yields with a discerning assessment of a company's ability to maintain those payouts over the long term.
Glencore Glencore is a globally diversified natural resources company. As of 2025, it offers a dividend yield of 7.4%, with a dividend cover of 2.01x, and a payout ratio of around 50%. The company faced dividend cuts in 2015, 2016, and 2020.
Taylor Wimpey Taylor Wimpey, a major UK residential developer, currently has a dividend yield of 6.8% and a dividend cover of approximately 1.8x. It did experience a dividend cut in 2020 due to the pandemic but has since resumed progressive payments.
BAT British American Tobacco (BAT) remains a strong dividend payer with a 2025 yield of 8.5%, a dividend cover of 1.5x, and no recent dividend cuts. It has a stable payout track record, benefiting from strong cash flows.
Legal and General Legal and General continues to perform well, offering a dividend yield of 8.1%, a cover of 1.7x, and a solid payout ratio. No reported dividend cuts recently, maintaining its appeal among income investors.
Aviva Aviva provides a yield of 7.3% in 2025, with a dividend cover of 1.6x. While it did cut dividends in 2013 and 2019, its financial position has strengthened considerably since then.
Barratt Developments Barratt Developments offers a dividend yield of 7.0% this year. Its dividend cover is over 2.0x, reflecting a more conservative payout approach after the pandemic-related cut in 2020.
Imperial Brands Imperial Brands remains a consistent payer, with a dividend yield of 7.8%, a dividend cover of 1.65x, and a payout ratio of about 60%. It had a dividend reduction in 2020 but has maintained or slightly increased dividends since then.
| Company | Dividend Yield | Dividend Cover | Payout Ratio | Dividend Cuts |
|---|---|---|---|---|
| Vodafone | 9.5% | 0.70x | 143% | 2018 |
| Glencore | 7.4% | 2.01x | 50% | 2015, 2016, 2020 |
| M&G | 9.2% | 0.90x | 111% | No |
| Phoenix Group | 9.0% | 0.55x | 182% | 2016, 2018 |
| Taylor Wimpey | 6.8% | 1.8x | 55% | 2020 |
| BAT | 8.5% | 1.5x | 67% | No |
| Legal and General | 8.1% | 1.7x | 59% | No |
| Aviva | 7.3% | 1.6x | 63% | 2013, 2019 |
| Barratt Develop. | 7.0% | 2.05x | 48% | 2020 |
| Imperial Brands | 7.8% | 1.65x | 60% | 2020 |
Investing in stocks that pay dividends is still a smart way to make money grow and stay stable in 2025. There are many different kinds of companies on the UK market, each with its own return, cover ratio, and payout ratio. These dividend-paying stocks can help you reach your financial goals, whether you're looking for steady income streams or long-term capital growth. For more information on resilient companies with a history of consistent dividend payments, be sure to explore the article on UK dividend aristocrats.
Remember that investing in dividends can be very profitable, but you need to do a lot of studying, think about how much risk you are willing to take, and talk to a professional to make smart decisions.
