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Most buyers purchase dividend shares to generate passive earnings, be it to complement their wage or prime 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 12 months.
Let’s have 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 history when it comes to distributing cash to its owners, investors have long gravitated towards the telecommunications behemoth for their dividend fix. But lately, this market juggernaut has been behaving almost like a growth stock! A 15% gain in 2026 compares favourably to the index’s 9% and provides to the tremendous momentum seen in 2025.
In fact, the rise in its share worth 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 customary index tracker would at the moment earn (2.9%).
After a tricky few years, it appears to be like 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 12 months appeared to mark an inflection level in sentiment.
My chief concern stays the large debt load. Sure, it’s decrease than a couple of years in the past. However ongoing and fierce competitors might make a considerable discount unlikely for now.
Future proof
Additionally on a cost is mining big 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 worth.
Regardless of this nice efficiency, there have been a couple of unstable days within the combine. A few weeks in the past, Rio’s worth dropped because it posted flat annual earnings and missed analyst expectations on account of weaker iron ore costs. This highlights the bumpy trip that each one buyers in commodities can anticipate.
Nonetheless, the probably large demand for the purple steel within the years forward because the world migrates in direction of to cleaner vitality sources absolutely bodes properly for Rio as each a long-term earnings and progress play.
Once more, the dividend yield isn’t fairly what it was. However 4.6% is hardly unhealthy. And though these money distributions can by no means be assured, they give the impression of being set to be lined by anticipated revenue.
Dependable earnings
Yielding 3.5%, energy supplier Nationwide Grid (LSE: NG.) completes our trio of earnings shares doing properly. Up 20% up to now, this historically ‘boring business’ has now hit a document excessive.
Now, I’ve all the time regarded this as a possible cornerstone of any dividend-focused portfolio. Along with regular-if-modest hikes to the entire amount of money returned, our fixed want for fuel and electrical energy makes this one of the crucial defensive companies round.
It’s not a slam-dunk funding, although. Like Vodafone, the Grid has an enormous debt pile, primarily on account of the price of sustaining its infrastructure. A price-to-earnings (P/E) ratio of 18 additionally makes Nationwide Grid shares the costliest of the three.
As more cash appears to be flooding into UK and European shares from throughout the pond, nevertheless, I believe the worth would possibly simply proceed going up.
