Top 10 UK dividend stocks, ranked by income quality

Only operating companies with their own London listing that actually pay are considered: dividends in at least three different calendar years within the last five years, and a trailing twelve-month yield between 1% and 12%. That leaves 263 companies out of 306 payers we can measure. Each one is scored on four things: the income lens (40%), which blends the yield and the length of the payment record against every London share; the risk lens (25%), which rewards a steady price; trading volume (20%); and trend (15%).

Income carries the most weight because this is a dividend list, but 60% of the score asks whether the share price has held up and the shares are easy to trade. That is deliberate: a high yield on a falling price is how a dividend cut often looks in advance, and the yield alone cannot tell the difference between a generous payer and a company the market has stopped believing.

Among the 263 eligible companies the highest trailing yield belongs to Central Asia Metals Plc (CAML) at 11.6%. It ranks 178 on this list, because its trend lens is 29 and its risk lens 31, both out of 100. 3 UK payers yield more than 12% and are left out altogether: at that level the cause is usually a one-off special dividend or a share price that has already collapsed, and either way the figure is a poor guide to what you would receive next year.

Many UK companies pay two dividends a year, a smaller interim and a larger final, so the trailing yield changes shape when the final is paid or skipped. The yield here is the sum of dividends whose ex-dividend date fell in the last twelve months divided by the latest share price. It uses payments that happened, not the company's forecast, and it includes special dividends, which can lift a company's yield for a year without repeating. Some UK-listed companies in oil, insurance and mining pay in US dollars; those payments are converted into pence at the latest exchange rate before dividing by the share price, and a nightly check compares a sample of our yields with an independent source.

Property companies structured as REITs are included when they pass the filters. They are required to pay out most of their rental profits, so their yields are high by design and say less about management generosity than they would for other businesses.

The figure shown is before tax. In a stocks and shares ISA, dividends are not taxed; outside one, UK dividend tax depends on an allowance and on rates that have been changed several times in recent years, so check HMRC's current figures before comparing a yield with what you would actually keep.

The typical eligible company yields 3.37%, and the typical company in the top ten 4.67%. The top ten yields more than the typical payer, but not by as much as a pure yield ranking would, which is the price of the steadiness rule: the list leans toward above-average yields on shares that have behaved, rather than the largest yields on offer. The UK Top 10 by price-based X-Ray score ranks the same companies without regard to income.