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Dividend shares delivered some staggeringly robust returns in 2025, with the FTSE 100 index as an entire delivering the most important beneficial properties since 2009.
But, even with such great progress underneath its belt, the UK inventory market would possibly nonetheless have some large winners in 2026. And proper now, institutional buyers have their targets locked on a handful of extra dividend-paying shares set to probably ship explosive beneficial properties this yr.
So the query is, what are these potential winners?
1. B&M European Worth Retail
After strategic missteps, stock mismanagement, missed earnings targets, and even a minor accounting scandal, B&M (LSE:BME) shares have been totally decimated in the previous couple of years. In actual fact, its market-cap has collapsed by nearly 70% within the final two years.
However with a brand new chief on the helm executing a contemporary turnaround technique, some institutional buyers consider an enormous shopping for alternative could have emerged.
Income progress stays lacklustre, however gross sales have begun slowly ticking up once more. And with worldwide operations constructing momentum, the consultants at Berenberg consider B&M shares may surge by 70% from present ranges if the turnaround is profitable.
Clearly, the inventory comes with important execution danger. And the fierce aggressive panorama from different low cost retailers solely provides to the problem. However with a 7.5% yield, the dividend inventory could possibly be price a better look.
2. Domino’s Pizza Group
Domino’s Pizza (LSE:DOM) is one other dividend-paying inventory that analysts consider could possibly be ripe for a turnaround. With the CEO lately stepping down and the financial panorama for pizza takeaway lower than best, the corporate’s equally been underneath important stress, with its shares being slashed in half since 2024 kicked off.
However with a brand new loyalty programme rolled out this yr, indicators of enhancing unit economics rising in Eire, and an industry-leading retailer footprint, the staff at Peel Hunt has issued a 275p share value goal – roughly 52% increased than the place the inventory trades at present.
After all, whereas the client loyalty programme had a profitable pilot scheme, that doesn’t imply a full-scale rollout will meet efficiency expectations. Continued macroeconomic weak point alongside UK pizza market saturation could stop this goal from being hit. However, with a 6.1% yield on supply, that is one other dividend inventory price investigating additional.
3. Mortgage Recommendation Bureau
One other dividend inventory on Berenberg’s procuring record is Mortgage Recommendation Bureau (LSE:MAB1). Simply final month, its analysts reiterated a 1,150p share value goal – roughly 50% forward of the place the inventory trades at present.
The forecast largely revolves round a UK housing market restoration narrative. An estimated 1.8 million fixed-rate mortgages are resulting from change to variable charges all through 2026, up from round 1.6 million in 2025. And with many households probably in search of to refinance, it creates a probably profitable advisory alternative for this enterprise.
The corporate’s going through more and more fierce competitors from massive banks providing mortgage advisory providers straight. What’s extra, the market appears to be pricing in a number of rate of interest cuts all through 2026. But when these fail to materialise, mortgage charges may really begin climbing once more, decreasing refinancing demand.
With a 2.8% dividend yield on supply, Mortgage Recommendation Bureau may nonetheless show to be a profitable earnings alternative. That’s why I feel it deserves a deeper dive. However there’s no denying important cyclical danger is connected.
