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Most buyers purchase dividend shares to generate passive revenue, be it to complement their wage or high up their pension. Nonetheless, the share costs of a few of the UK’s hottest examples have additionally been rocketing for the reason that begin of the yr.
Let’s take a look at three examples which are outpacing the FTSE 100 and would possibly simply proceed doing so for the rest of 2026.
Turnaround dividend inventory
Regardless of Vodafone‘s (LSE: VOD) chequered historical past in relation to distributing money to its homeowners, buyers have lengthy gravitated in the direction of the telecommunications behemoth for his or her dividend repair. However recently, this market juggernaut has been behaving virtually like a progress inventory! A 15% acquire in 2026 compares favourably to the index’s 9% and provides to the tremendous momentum seen in 2025.
After all, the rise in its share value has lowered the dividend yield. Proper now, this stands at 3.6% — pretty modest when different shares within the FTSE 100 are yielding as much as 8%. However it’s greater than a bathroom normal index tracker would presently earn (2.9%).
After a tricky few years, it seems like buyers are warming to this firm’s technique of promoting its non-core companies and focusing extra on progress markets. Certainly, the completion of its merger with Three UK final yr appeared to mark an inflection level in sentiment.
My chief concern stays the huge debt load. Sure, it’s decrease than a number of years in the past. However ongoing and fierce competitors may make a considerable discount unlikely for now.
Future proof
Additionally on a cost is mining large Rio Tinto (LSE: RIO). Its shares have carried out even higher — rising over 20% for the reason that begin of January — helped by a surging copper value.
Regardless of this nice efficiency, there have been a number of risky days within the combine. A few weeks in the past, Rio’s value dropped because it posted flat annual earnings and missed analyst expectations because of weaker iron ore costs. This highlights the bumpy experience that each one buyers in commodities can anticipate.
Nonetheless, the probably enormous demand for the pink metallic within the years forward because the world migrates in the direction of to cleaner power sources certainly bodes properly for Rio as each a long-term revenue and progress play.
Once more, the dividend yield isn’t fairly what it was. However 4.6% is hardly dangerous. And though these money distributions can by no means be assured, they appear set to be coated by anticipated revenue.
Dependable revenue
Yielding 3.5%, energy supplier Nationwide Grid (LSE: NG.) completes our trio of revenue shares doing properly. Up 20% up to now, this historically ‘boring enterprise’ has now hit a report excessive.
Now, I’ve at all times regarded this as a possible cornerstone of any dividend-focused portfolio. Along with regular-if-modest hikes to the whole amount of money returned, our fixed want for fuel and electrical energy makes this some of the defensive companies round.
It’s not a slam-dunk funding, although. Like Vodafone, the Grid has an enormous debt pile, primarily because of the price of sustaining its infrastructure. A price-to-earnings (P/E) ratio of 18 additionally makes Nationwide Grid shares the most costly of the three.
As extra money appears to be flooding into UK and European shares from throughout the pond, nevertheless, I feel the worth would possibly simply proceed going up.
