Key Takeaways
- The majority of stocks on the dividend screen increased dividends year over year.
- This is a key time of the year for UK income seekers, with quarterly and final dividends declared.
- BP and Shell increased their payouts amid a rise in share prices.
Each month we check in on the latest dividend news from the UK’s income-paying stocks, screening for FTSE 100 companies with a wide or narrow economic moat.
This has been an eventful earnings season for income hunters, with a raft of dividend increases, and a handful of cuts—such as to the Diageo DGE payout—that were badly received by investors. Earnings season has seen some wild swings in share prices too: Intertek ITRK and Reckitt RKT plunged on the day of results, while Rentokil saw its shares pushed up 13% on March 5 after stronger earnings numbers. Buybacks also moved up the agenda: Oil giant and dividend stalwart BP BP scrapped its programme, while UK defense and aerospace stock Rolls-Royce RR. pledged to buyback shares worth up to £9 billion over the next two years.
This time of year is crucial for dividends: Stocks on a quarterly payout cadence reveal their final payout for the year, allowing a complete calculation for the full year; and for those stocks paying six-monthly income, final dividends are declared at this stage and paid in the coming weeks.
FTSE 100 Companies Increasing Dividends
Lloyds Banking Group LLOY kicked off UK earnings season for those on our income screen with a dividend increase. The company announced on Jan. 29 that the final dividend of 2.43p will be paid May 19. This means the full-year payout will be 3.65p for the year, versus 3.17p the previous year.
Pharmaceutical stock GSK GSK also had some positive news for shareholders: With an 18p payout for Q4, the total dividend for the 2025 financial year will be 66p per share, versus 61p in 2024. The company also committed to a dividend increase for the 2026 financial year, targeting 70p per share.
British American Tobacco BATS followed up on Feb. 12 by announcing a new payment scheme for 2026. As with previous years, investors are told the quarterly income payouts in advance: they will get four equal quarterly instalments of 61.26p per ordinary share in May 2026, August 2026, November 2026 and February 2027. This is slightly above the 60p paid to shareholders last year.
The following list contains those stocks on the monthly dividend screen, as well as those like Shell SHEL whose payouts make up a large chunk of UK dividend income.
Which FTSE 100 Stocks Increased Their Dividends in Earnings Season?
- Lloyds Banking Group LLOY
- Unilever ULVR
- Croda CRDA
- NatWest NWG
- Bunzl BNZL
- Intertek ITRK
- Shell SHEL
- Rolls-Royce RR.
- BAE Systems BA.
- HSBC HSBA
- London Stock Exchange LSEG
- Reckitt RKT
- Admiral ADM
Which FTSE 100 Stocks Cut Their Dividends in Earnings Season?
Investor Surprises: Schroders Takeover, Diageo Dividend Cut
Schroders SDR, a top yielder on our monthly screen, brought takeover drama to earnings season. The storied City of London money managers unveiled as part of the Feb. 12 update that it has agreed a takeover by US asset manager Nuveen. While this raises the prospect of the loss of income for UK investors if Schroders is taken private, the deal values the UK company at a significant premium to its pre-takeover price, with shares are up more than 50% so far this year. The deal, worth 612p per share, even includes a dividend payment of 22p for Schroders’ shareholders.
On Feb. 25, Diageo also surprised shareholders by cutting its interim dividend. The shares slid 13% on the day as the drinks company announced lower US and China sales and reduced earnings targets for this financial year.
Advertising giant WPP also cut its dividend on an earnings day when it announced AI-related job losses. But Morningstar analysts argue that the move is part of a necessary financial reset for the company, whose shares have lost more than 20% in the year to date and nearly 50% since March 2025.
“The dividend cut is sure to bother yield-focused investors (yield was approximately 15%, now it’s around 5%),” the analysts say.
“Undoubtedly, the dividend cut carries the risk of alienating value investors while hoping the market will accept the turnaround narrative. The move frees up approximately GBP 300 million to fund restructuring, though the ultimate return on these projects remains uncertain.”
Oil Stocks Up, Dividends Too
UK oil stocks are in focus because of the Iran War, which has pushed crude prices up to more than USD 100 a barrel. BP and Shell, whose shares have increased by 15% in the year to date, both announced dividend increases. While BP ditched its buyback program, it reasserted its commitment to payout increases.
“Our first capital allocation priority is a resilient dividend, which is expected to increase by at least 4% per ordinary share a year,” the company said.
Which FTSE 100 Stocks Changed Their Buyback Policy?
- BP, scrapped
- Rolls-Royce, extended to 2028
Methodology for UK Dividend Stock Screen
To make it on to our monthly list, FTSE 100 companies need now to have a Narrow or Wide Morningstar Economic Moat Rating, pay a dividend, and have a forward yield of 3% or more. This is below the Bank of England base rate, which stands at 3.75%. The methodology was changed in 2022, introducing a forward dividend yield hurdle of 3%.
