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10 Best FTSE Dividend Stocks To Invest In

In this article, we discuss 10 best FTSE dividend stocks to invest in. You can skip our detailed analysis of FTSE and dividend stocks, and go directly to read 5 Best FTSE Dividend Stocks To Invest In.

In the first half of 2023, the companies listed in the UK’s FTSE 100 stock index didn’t do well, as opposed to 2022 when the FTSE 100 recorded a modest increase of about 2%, which was better than many other international stock markets. Year-to-date, the FTSE is down 2.18% while its 12-month returns came in at a negative 1.94%.

The Bank of England is concerned about high prices in the UK. In July, the headline CPI measure was 7.9%, down from 11.1% last October, mostly because energy prices went down. So, the Bank raised interest rates 14 times since December 2021, going from 0.1% to 5.25% by August this year. That said, the Bank doesn’t think that the country will face a recession in the upcoming years. This view is also supported by International Monetary Fund (IMF). Back in April, the IMF predicted that the UK economy would do the worst among major economies in 2023, contracting by 0.3%. However, in May, they changed their prediction and now expect the UK economy to grow by 0.4%. This does not indicate that the economy is completely safe at the moment, as analysts have varying opinions about how things will go in the future.

The dividend forecasts in 2023 and 2024 for the FTSE 100 companies are staying relatively steady, although they haven’t completely bounced back from the decreases seen earlier this year. According to a report published by a British financial company, AJ Bell, total dividends paid out by the FTSE 100 index are expected to read to £83.8 billion in 2023. This is a rise from £76.1 billion in 2022 and £78.5 billion in 2021, excluding special dividends.

Also read: 10 UK Dividend Growth Stocks to Consider

Despite the uncertain economic conditions, companies are showing strong confidence. In 2022, 43 of the FTSE 100 companies conducted share buyback programs to give more money back to shareholders. Additionally, in 2023, thirty-four companies in the index have either announced intentions or already initiated cash returns to shareholders through this method. The report further mentioned that the companies in the FTSE 100 index are set to give back a total of £122 billion to investors through regular dividends, special dividends, and buybacks this year. This is close to the record amount of £137.6 billion seen in 2022 and nearly matches the previous high of £124.3 billion reached in 2018. In addition to this, there’s also a chance of more buybacks happening in the second half of the year.

Some of the best FTSE dividend stocks include Shell plc (NYSE:SHEL), AstraZeneca PLC (NASDAQ:AZN), and British American Tobacco p.l.c. (NYSE:BTI) among others that are mentioned below.

Photo by NeONBRAND on Unsplash

Our Methodology:

For this article, we scanned through the list of FTSE stocks and picked dividend stocks from the list. From the resultant dataset, we picked 10 stocks with the highest number of hedge fund investors tracked by Insider Monkey as of Q1 2023.

10. Pearson plc (NYSE:PSO)

Number of Hedge Fund Holders: 6

Pearson plc (NYSE:PSO) is a London-based company that operates in the education sector and publishing. In the first half of 2023, the company reported sales of over £1.8 billion, which showed a 5% growth from the same period last year. Its operating cash flow for the period came in at £106 million, up from £53 million in the prior-year period.

On August 9, Pearson plc (NYSE:PSO) declared a semi-annual dividend of $0.09 per share. During the first half of the year, it returned £106 million to shareholders, which makes it one of the best FTSE dividend stocks to buy. The stock has a dividend yield of 2.66%, as of August 15. Other FTSE dividend stocks to consider include Shell plc (NYSE:SHEL), AstraZeneca PLC (NASDAQ:AZN), and British American Tobacco p.l.c. (NYSE:BTI).

At the end of Q1 2023, 6 hedge funds in Insider Monkey’s database reported having stakes in Pearson plc (NYSE:PSO), which remained unchanged from the previous quarter. The collective value of these stakes is over $16.4 million. Among these hedge funds, 13D Management was the company’s leading stakeholder in Q1.

9. NatWest Group plc (NYSE:NWG)

Number of Hedge Fund Holders: 10

NatWest Group plc (NYSE:NWG) is a retail banking company that also offers a wide range of commercial banking services to its consumers. On August 9, the company declared a semi-annual dividend of $0.1415 per share for a dividend yield of 6.62%, as of August 15. It is one of the best FTSE dividend stocks on our list.

In the first half of 2023, NatWest Group plc (NYSE:NWG) reported a total income of £3.85 billion, which was up by nearly 20% from the same period last year. During the period, the company returned £0.3 billion to shareholders through dividends.

The number of hedge funds tracked by Insider Monkey owning stakes in NatWest Group plc (NYSE:NWG) grew to 10 in Q1 2023, from 7 in the previous quarter. These stakes are collectively worth over $18.6 million. With over 1 million shares, Balyasny Asset Management was the company’s leading stakeholder in Q1.

8. CRH plc (NYSE:CRH)

Number of Hedge Fund Holders: 13

CRH plc (NYSE:CRH) is a multinational company that operates in the building materials and construction industry. The company is involved in various aspects of construction materials and infrastructure development.

CRH plc (NYSE:CRH) is one of the best FTSE dividend stocks on our list as it has paid regular dividends to shareholders since its formation in 1970. It currently pays a semi-annual dividend of $0.13 per share and offers a dividend yield of 2.29%, as recorded on August 15. This dividend showed a 329.2% increase from its previous interim dividend of $0.24 per share.

In FY22, CRH plc (NYSE:CRH) posted revenue of $32.7 billion, which saw a 12% growth from the same period last year. During the year, the company also invested $3.3 billion in solutions-focused acquisitions.

CRH plc (NYSE:CRH) was a popular buy among hedge funds in the first quarter of 2023, as 13 funds in Insider Monkey’s database owned stakes in the company, compared with 7 in the previous quarter. These stakes have a collective value of roughly $160 million.

L1 Capital mentioned CRH plc (NYSE:CRH) in its Q2 2023 investor letter. Here is what the firm has to say:

CRH plc (NYSE:CRH) and Eagle Materials, the Fund’s two building materials investments, continued to contribute strongly to the Fund’s performance. Both companies have diversified exposure to residential (new and repair and renovation), commercial, and infrastructure construction. Eagle Materials is a purely US domestic business, while CRH generates around 75% of its earnings in North America and the vast majority of the remainder in Europe (if you step on a concrete manhole cover in Australia it was probably manufactured by CRH). (Click here to read the full text)

7. HSBC Holdings plc (NYSE:HSBC)

Number of Hedge Fund Holders: 13

HSBC Holdings plc (NYSE:HSBC) is a multinational banking and financial services company, headquartered in London, United Kingdom. At the end of Q1 2023, the company was a part of 13 hedge fund portfolios, up from 11 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these elite funds have a total value of over $96.6 million.

On August 1, HSBC Holdings plc (NYSE:HSBC) declared an interim dividend of $0.50/ADS. Furthermore, the board plans to give priority to using the money earned from selling our Canadian banking business in the first half of 2024 to pay a special dividend of $0.21 per share. The stock has a dividend yield of 5.57%, as reported on August 15.

In the first half of 2023, HSBC Holdings plc (NYSE:HSBC) reported strong earnings with its revenue jumping to $36.8 billion, from $24.5 billion in the prior-year quarter. The company’s operating cash flow for the period came in at over $30 billion.

6. Barclays PLC (NYSE:BCS)

Number of Hedge Fund Holders: 15

Barclays PLC (NYSE:BCS) ranked sixth on our list of the best FTSE dividend stocks to invest in. The British multinational bank declared a semi-annual dividend of 10.8 pence/ADS. The stock has a dividend yield of 5.28%, as of August 15. In addition to BCS, Shell plc (NYSE:SHEL), AstraZeneca PLC (NASDAQ:AZN), and British American Tobacco p.l.c. (NYSE:BTI) are some other FTSE dividend stocks to add to portfolios.

During the first half of the fiscal year 2023, Barclays PLC (NYSE:BCS) made a profit of £3.11 billion, marking a 26% increase compared to the same time last year. However, its total income of £9.8 billion decreased by 2% in comparison. The company’s cash and balances held in central banks grew to £35.2 billion due to higher investments in debt securities within the Treasury.

At the end of March 2023, 15 hedge funds in Insider Monkey’s database reported having stakes in Barclays PLC (NYSE:BCS), up from 14 in the previous quarter. These stakes have a total value of roughly $179 million.

Click to continue reading and see 5 Best FTSE Dividend Stocks To Invest In

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Disclosure. None. 10 Best FTSE Dividend Stocks To Invest In is originally published on Insider Monkey.

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