3 rock-solid FTSE dividend stocks yielding over 5%

There’s no sure thing when it comes to dividend stocks. But payouts from these FTSE firms have been more reliable than most and look set to keep growing.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Investors looking for dividend stocks to buy are spoilt for choice in the UK. Although the passive income can never be guaranteed, there are plenty with dividend yields of more than 5% right now.

Dividend powerhouse

Online trading platform provider IG Group (LSE: IGG) is one of my favourite dividend distributors in the FTSE 250 for several reasons.

First, the yield currently stands at 5.2%. That’s far above the 3.2% that I’d get from a fund tracking the index. It’s also impressively large considering IG shares have been on an absolute tear recently, rising 43% in the last 12 months.

Should you invest £1,000 in National Grid right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if National Grid made the list?

See the 6 stocks

Created with Highcharts 11.4.3IG Group Holdings PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Second, analysts believe this year’s payout will be covered over twice by profit. While it’s best to treat forecasts with a pinch of salt, recent numbers suggest the company is trading well. As a result of this (and my third reason), IG’s dividends should continue rising — a really encouraging sign.

Since clients trade more when share prices get volatile, an ever-present concern is that markets drift sideways for a while. This company (and its peers) are also an easy target for regulators. But a low price-to-earnings (P/E) ratio of nine still looks attractive to me.

I just need the cash to invest.

Still holding

Another stock yielding over 5% is MONY Group (LSE: MONY) — the owner of price-comparison site Moneysupermarket.com. I own a slice of the £1.2bn cap myself.

The share-price performance has been poor in the last year or so. But I’ve stayed invested for the income stream. As things stand, MONY yields a juicy 5.9%. After a lull, management also started raising dividends again in 2022.

Created with Highcharts 11.4.3Mony Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

One clear threat is the number of players in this space. This is to be expected given the huge operating margins that can be generated.

But a P/E of just under 13 arguably takes this into account. When the energy markets gets more competitive (pushing more people to search for and eventually switch provider), I think the share price will respond positively.

I’m staying put.

Under-the-radar income

A final option for solid dividends is ZIGUP (LSE: ZIG), formerly Redde Northgate. Arguably the least well known of the three, this firm specialises in vehicle rental and accident management.  

Now, ZIGUP’s dividend history is pretty great but it’s not perfect. Back in 2020, for example, the payout was cut by almost 30% (to 13.1p per share).

To be fair, that year was a blip for most of us. And the Darlington-based business quickly returned to growing its total dividend. In FY25, it’s expected to be 25.9p per share.

However, it does highlight the dangers of holding a company whose fortunes can ebb and flow with the health of the wider economy. I’m also a bit wary of the amount of debt on its balance sheet.

Created with Highcharts 11.4.3Zigup Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

But ZIGUP could still be a worthy addition to a diversified portfolio. At 6.7%, the yield is over double that of the FTSE 250 and goes some way in making up for the extra risk involved.

At just seven times forecast earnings, the valuation is also low for the Industrials sector and the UK market as a whole. For now, it goes on the watchlist until I have the funds to make a final decision.

But there may be an even bigger investment opportunity that’s caught my eye:

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Paul Summers owns shares on Mony Group Plc. The Motley Fool UK has recommended Mony Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Here’s how a 40-year-old could start investing £100 per week to retire early

If a 40-year-old decides to start investing today, here's how they could potentially turn £100 a week into over £500k…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The FTSE 100 is up 60% in 5 years. Here’s why — and a big lesson!

The flagship FTSE 100 index has put in a very strong performance over five years. There's a specific reason for…

Read more »

Investing Articles

How much do investors need in an ISA to earn a £2,500 monthly passive income?

Charlie Carman explores how investors could strive for £30k in tax-free passive income each year from a dividend stock portfolio.

Read more »

Investing Articles

How much would a 45-year-old need to invest in an ISA to earn a £1k monthly passive income at 65?

Harvey Jones looks at how much an investor would need to put away every month to build a steady passive…

Read more »

Investing Articles

3 things to do ahead of the new 2025-26 ISA year

It's time for us all to put on our investing boots and get to work on developing our plans for…

Read more »

Older couple walking in park
Investing Articles

Is £150,000 enough to generate £1,000 a month in passive income?

Stephen Wright takes a look at three UK stocks with dividend yields above 8% that passive income investors might be…

Read more »

Investing Articles

Aim to earn a £50k second income in retirement by investing just this much each month

Even with a small monthly investment, it’s possible to earn a £50k second income with a successful investment strategy and…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 22% in a month! Is this my chance to buy shares in this FTSE 100 outperformer?

Shares in InterContinental Hotels Group have outperformed the FTSE 100 over the long term. So is a chance to buy…

Read more »