3 dividends have been asked to overtake Rolls-Royce on the UK stock market in 2026.
There is no denying that Rolls-Royce has had a spectacular run on the UK stock market over the past two years. But now that the price is surprisingly high, analysts expect little further growth from the stock over the next 12 months.
So here are three more stocks to consider with higher growth forecasts. And not only that – each of them pays a hefty share to get started!
Image source: Getty Images
ICG
ICG‘s (LSE: ICG) specialist lender and asset manager, helping large investors to invest in private debt and infrastructure deals. That means it gets solid payouts, and additional income if the investment does well. With a yield of around 5% supported by growing profits and assets under management, it looks attractive for both income and capital growth.
The best part? It has a great record (31 years) of uninterrupted dividend payout.
Key to capital growth is that pension funds and insurers are still shifting money from bonds to private debt, which is in line with ICG’s performance. On the other hand, a severe recession or credit cut could affect dealmaking and increase defaults, putting pressure on earnings and profits.
Still, for patient investors who are comfortable with potential market volatility, I think it’s worth a careful look.
Barratt Redrow
Barratt Redrow‘s (LSE: BTRW) housebuilding giant was formed from the merger of Barratt Developments and Redrow, giving it a large footprint across the UK. It has an attractive yield of 4.5% and will benefit if mortgage rates continue to decline and consumer confidence continues to improve.
Long-term demand for family housing combined with government pressure to increase housing supply supports the growth narrative.
However, property is a cyclical business. If the UK goes back into recession, sales and profits (and dividends) could suffer. Inflation in construction costs, planning delays, and any change in housing policy is an additional headache.
For investors who are willing to go through a cycle with few ups and downs, it can be an opportunity to take advantage of a gradual housing recovery with additional income.
DCC
DCC‘s (LSE: DCC) diversified distributor, mainly in energy (such as LPG and petrol), but also in healthcare and technology products. Think of it as the medium that keeps most of the day-to-day services running, which helps smooth profits over time.
Like ICG, it has a 31-year payout history, with many years of consistent growth and a 4% yield that is well covered by cash flow. There is moderate growth potential from acquisitions and the shift to clean energy solutions, such as connected services and renewables.
On the risk side, the demand for traditional oil will gradually decline as the world grows, so management must adapt to new business ideas. If you like reliable, boring companies in a good way and can live with some acquisition risk, DCC looks like a smart candidate to consider for a long-term UK income portfolio.
Looking beyond the headlines
ICG, Barrett Redrow and DCC are three lesser known ones FTSE 100 stocks rarely make headlines. But they are the kind of dull companies that can quietly integrate within a retirement-focused ISA.
Impressive stories like the Rolls-Royce may make headlines for a short time, but in the long run, the turtle here wins the race. For investors with a 20-30 year horizon, reliable (and reinvested) dividends can make a difference.
