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UK High Yield Dividend Aristocrats

The UK High Yield Dividend Aristocrats 2020 are U.K. stocks that have increased or maintained their dividend for ten consecutive years. But that alone does not qualify a stock as UK High Yield Dividend Aristocrat. To be included on the list, a company must meet the following criteria as stated in the S&P UK Dividend Aristocrats fact sheet:

  • The company must be a member of the S&P Europe BMI domiciled in a eurozone country. The stock must also trade in Euros on a stock exchange in the eurozone.
  • The stock must have increased or maintained stable its dividend for at least 10 consecutive years. The yield cannot be greater than 10%. New index constituents must have a maximum of 100% dividend payout ratio. Existing index constituents must have a non-negative dividend payout ratio.
  • The stock must have a market capitalization of at least $1 billion.
  • The median daily value traded (MDVT) must be at least $5 million for the three months prior to the rebalancing date.
  • During the quarterly rebalancing the weighting of a single stock is capped at the lower of 5% or five times the stock’s liquidity weight
  • Each sector’s weighting is capped at 30%. Weightings are based on yield.
  • The weighting of each country os capped at 30%.
  • Index constituents are reviewed for dividend suspensions and cuts on a monthly basis. If a stock announced a dividend suspension or cut, it is removed from the index and replaced highest-ranked stock that is not already in the index.
UK High Yield Dividend Aristocrats 2020

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These criteria are very different from those used to determine the list of Dividend Aristocrats in the U.S., which must be in the S&P 500 and need 25+ years of increasing dividends. They are also very different than the criteria used to determine the list of Canadian Dividend Aristocrats, which has smaller market capitalization and consecutive annual dividend increase requirements. The UK High Dividend Aristocrats 2020 are similar in that the indices are weighted by yield. There are currently about 65 stocks in the U.S. Dividend Aristocrats. This number is not capped. On the other hand, there are only 35 stocks in the UK High Yield Dividend Aristocrats 2020 list as of October 20, 2020. But this is by design.

The UK High Yield Dividend Aristocrats 2020 currently (as of October 30, 2020) has a yield of about 4.6%, and the average forward price-to-earnings ratio is approximately 13.6X. The mean market capitalization is roughly $17,072 million, and the median market capitalization is roughly $7,118 million. The market cap ranges between about $1,075 million to $101,873 million. The total market capitalization is approximately $597,516 million.

The UK High Yield Dividend Aristocrats Performance in 2020

The UK High Yield Dividend Aristocrats provided a return of -5.3% in October. On a year-to-date basis, the UK High Yield Dividend Aristocrats have returned -24.95%. IN the past ten years, the UK High Yield Dividend Aristocrats have exhibited an annualized total return of 4.28% with a standard deviation of 13.1%

Source: S&P 500 Dow Jones Indices

Other Dividend Growth Stock Lists

For U.S. stocks, I have previously provided the following lists:

For Canadian stocks, I have previously provided the following list:

Details on the UK High Yield Dividend Aristocrats 2020

The list of UK High Yield Dividend Aristocrats 2020 has a target of 40 stocks. In practice, the actual number is typically between 30 and 40 stocks. There are 35 stocks on the list as of this writing. Note that there is a proposal to change the selection process to adjust the number of years of increasing dividend and market cap if there are less than 40 eligible stocks.

These companies have survived periods of inflation, stock market crashes, global crises, and deep recessions but still met the criteria described above. Often these are the most prominent and typically well-known stocks in the UK with high yields. Hence, this list serves as a starting point for small investors to research potential ideas for UK dividend stocks.

The sector breakdown for UK High Yield Dividend Aristocrats 2020 is seen in the chart below as of June 30, 2020. Stocks from the Financials sector have the most significant representation on the UK High Yield Dividend Aristocrats list at about 30.3%. The sector with the following highest representation is Consumer Staples at approximately 21.1%. The sector with the third-highest representation is the Real Estate Sector at roughly 11.9%.  Combined, the top three sectors make up that great majority of the UK High Yield Dividend Aristocrats at about 63.3%.

Stocks in the Financial sector tend to have somewhat more volatile earnings and cash flows that depend on the stock market valuation and interest rates. On the other hand, consumer staples tend to have stable earnings and cash flows. This fact tends to limit dividend cuts and suspensions during a recession and economic downturns. Further, consumer staples stocks in general slowly grow revenue and earnings over time. In turn, this allows annual regular dividend increases. The Real Estate sector is also cyclical and depends on interest rates.

This sector breakdown is unlike the U.S. Dividend Aristocrats list, with Industrials, Consumer Staples, and Financials as the top three sectors.  The sector breakdown is also unlike the Canadian Dividend Aristocrats list, with Financials, Energy, and Industrials as the top three sectors.

Source: S&P 500 Dow Jones Indices

The stocks with the top 10 weighting in the UK High Yield Dividend Aristocrats are listed below. Note that the weightings are based on yield. The top 10 stocks in the list constitute about 47% of the UK High Yield Dividend Aristocrats.

As a group, some funds have exhibited lower annualized total returns than the UK High Yield Dividend Aristocrats index. For example, one fund has displayed lower annualized returns of 3.06% (after subtracting expenses) than the underlying index of 3.56% since inception. This difference is likely due to annualized tracking error, which is the difference between the fund’s price and the index’s price. However, this can also occur due to changes in the underlying index resulting in higher transaction costs for funds.

Note that there is some confusion on the actual index and some exchange-traded funds or ‘ETFs’ that use the index as the basis of stock selection. For example, at least one fund uses 7+ consecutive years of dividend growth as a criterion for inclusion instead of 10+ years of dividend growth.

List of of Top 10 UK High Yield Dividend Aristocrats 2020

NameWeighting (%)
Jupiter Fund Management6.14
Phoenix Group Holdings5.15
United Utilities Group5.11
British American Tobacco PLC5.04
Legal & General Group5.02
WM Morrison Supermarkets4.49
GlaxoSmithKline PLC4.45
Tate & Lyle PLC4.16
Pennon Group3.87
Big Yellow Group PLC3.80

Source: S&P UK High Yield Dividend Aristocrats Index and SPDR S&P 500 UK Dividend Aristocrats UCITS ETF (Data as of October 30, 2020)


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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.

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