The highest yielding companies across stock market sectors

The UK stock market is known for a being a handy source of dividends, but within this overall picture, certain sectors do a lot of the heavy lifting.

The FTSE 100 is forecast to provide a dividend yield of 3.4% for 2026. According to AJ Bell’s Dividend Dashboard report released in December 2025, just 10 companies are forecast to pay out 54% of the forecast total dividends for 2026, with two companies each from the oil, pharmaceutical, banking and consumer staples sectors and one apiece from the mining and utility industries. 

The monetary value of a dividend does not tell the whole story. To calculate the yield on offer from a dividend you need to compare how much is being paid out against the share price.

It is important to remember that a high dividend yield, while potentially enticing, can also be a warning sign that dividend is at risk of being cut or even cancelled. Really high yields are often to be found with companies whose shares have been under pressure, given the yield runs inverse to the share price. 

A generous-looking yield is a starting point for further investigation but far from a guaranteed stream of income. Plus, these are only estimates, and you might get less money in dividends than these forecast numbers suggest. It’s important to have a diversified portfolio so you are not reliant on one or a handful of stocks for your investment income.

Broadening things out and looking at the FTSE 350 (encompassing both the FTSE 100 and mid-cap FTSE 250 index) we’ve identified the names offering the highest forecast yields from different parts of the market.

Consumer-facing names

Among consumer-facing names, Pets at Home offers the most generous yield of the FTSE 350’s consumer-facing names. The company has found life difficult thanks to competition from non-specialists and due to a regulatory probe hanging over its veterinary business. 

Supermarket Sainsbury’s is also on the list thanks to a one-off ‘special’ dividend linked to the recent sale of its banking business. Investors shouldn't assume that special dividends happen each year. They are generally paid when a business sells a large operation or has a windfall which it wants to share with investors.

Next, which has been a strong performer in the sector, is perhaps a more surprising entry on the list. The company makes decisions on how it returns surplus cash to shareholders in a very transparent way and based on several factors. 

The high forecast yield potentially reflects a bias towards dividends instead of purchasing its own shares through a buyback programme when its stock is close to all-time highs. 

Banks and insurers

Insurers and banks are often popular sources of income with some very generous dividend yields on offer. Insurers collect premiums from customers and aim to pay less out in claims. Assuming they get this right, there isn’t the same need to invest in the business in the way a manufacturing company might, for example, and this means there is often plenty of cash left over to pay dividends.

Like insurers, banks pay generous dividends because they’re mature businesses which generate plenty of cash and don’t have huge growth opportunities to invest in.

Putting aside Lancashire, which as in the example of Sainsbury’s above, is expected to pay a large special dividend, Legal & General offers the most generous yield – implying £880 in dividends for someone with a £10,000 holding in the company. 

Of the big banks, NatWest is the really generous yielder, reflecting a lower valuation than some of its peers and a commitment to robust shareholder returns following its return to full private ownership in 2025.

Housebuilders 

Housebuilders were a very fruitful source of dividends following their recovery from the financial crisis. They benefited from a strong property market, sustained by affordable mortgages in a lower interest rate environment, government support in the form of the Help to Buy scheme and limited build cost inflation.

That picture has shifted in recent years, but there are still some generous yields on offer from this part of the market – most notably Taylor Wimpey. The company is trading near 10-year lows after its latest results revealed significant pressure on profit margins. Persimmon and Barratt Redrow potentially look more stable than their counterpart and offer yields of more than 5%.

Pharmaceuticals companies

Because pharmaceuticals are, in theory, less exposed to ups and downs in the economy, they can be a reliable source of dividend income, albeit with less generous yields than some other parts of the market. Hikma Pharmaceuticals, which specialises in generic drugs (medicines and treatments no longer protected by patents), is the top yielding name in this sector after the shares fell on a big cut to revenue guidance in February 2026. 

Resources firms

Resources names can offer generous dividends, but their payouts can also be unpredictable thanks to the volatile pricing of the commodities they produce. Oil and gas firms are in line to benefit from the recent move higher in energy prices thanks to the situation in the Middle East. Companies with operations in the region, however, could see their output disrupted – the top yielder Energean, for example, is based in Israel.

Mining companies are benefiting from historically high metals prices, and this cash is enabling gold miners in particular to pay out substantial dividends.   

Utilities

Because the returns utility companies generate are driven by the regulator and therefore highly predictable (as well as often being linked to inflation), the companies which supply our electricity, gas and water are a popular destination for dividend hunters.

Yields in the water sector are currently higher than for others due to industry issues. South West Water owner Pennon offering the most generous dividend yield among the utilities names.