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.

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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.

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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.

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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.

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