My top UK dividend shares to buy for December 2022

These dividend shares are backed by businesses with impressive trading and financial records and I’d snap them up now to hold long term.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Shot of a senior man drinking coffee and looking thoughtfully out of a window

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

If I had spare cash to invest, I’d buy the following three dividend shares to hold through December and beyond.

Consistent cash flow

With its share price near 200p, Moneysupermarket.com (LSE: MONY) has a forward-looking dividend yield of just over 6% for 2023.

I think that’s attractive because the price comparison website operator has a multi-year record of consistent cash flow and shareholder payments. The compound annual growth rate of the dividend is running at around 3.5%.

In October’s third-quarter trading update, Moneysupermarket reported “Growth in the quarter ahead of expectations.” Revenue increased by 15% over three months and by 6% for the nine-month period. And, looking ahead, the directors expect full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) to be “towards the upper end of market expectations”.

Chief executive Peter Duffy said there are early signs of improving trends in the Insurance market. And, in the firm’s Money division, “More consumers are finding attractive products to switch to”. He reckons the firm’s “strong brands” will help to support consumers during the current economic hardships. 

It’s possible that Moneysupermarket’s revenue could dip if the general economic slowdown gains traction. But I’d shoulder the risks and buy this stock for dividend income today.

Rising dividends

The shares of Spectra Systems (LSE: SPSY) are near 160p. And the forward-looking dividend yield is just above 6% for 2023.

Spectra describes itself as a leader in machine-readable, high-speed banknote authentication, brand protection technologies, and gaming security software. And the firm’s activities have generated a multi-year record of strong cash flow and rising shareholder dividends.

In September’s half-year results report, the company posted a 15% increase in revenue compared to the figure 12 months earlier. And cash generated from operations increased by more than 50%.

Looking ahead, chief executive Nabil Lawandy said Spectra will likely “meet market expectations for the full year”. City analysts have pencilled in single-digit-percentage increases for earnings and the dividend for this year and in 2023.

Spectra is a tiny listed business with a market capitalisation of just under £68m. There’s some risk in that situation. But the balance sheet is strong. And I’d buy the stock for income.

A privileged position

Near 1,028p, the National Grid (LSE: NG) share price throws up a forward-looking dividend yield of just over 5.5% And that’s for the trading year to March 2024.

The company’s privileged position at the heart of the UK’s electricity transmission and distribution infrastructure leads to consistent cash flows. And there’s a sizeable energy business in the US as well.

Both the dividend and operational cash flow show a multi-year rising trend. And that’s attractive to me. However, the business faces heavy regulation and must constantly reinvest a lot of money to maintain and upgrade its networks. 

There’s a lot of debt on the balance sheet, but I reckon the consistent trading and financial record helps to justify that. Nevertheless, future regulatory demands could inhibit the company’s ability to keep its dividend growing.

On 10 November, the company delivered a strong set of half-year figures and a bullish outlook statement. I’d embrace the risks and hold this stock for the long term.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Person holding magnifying glass over important document, reading the small print
Investing Articles

I think shares in this FTSE 100 company are undervalued right now

After a series of acquisitions, Informa’s balance sheet is loaded with goodwill. But is this hiding the true value of…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here are the FTSE 100 shares that have outperformed the S&P 500 since 2020

A surprising number of FTSE 100 stocks have outperformed their S&P 500 counterparts over the last five years. But can…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

Prediction: in 12 months the recovering Vodafone share price could turn £10,000 into…

Harvey Jones has been watching the Vodafone share price slide for so long that he can't come to terms with…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Down 35% with a 5% yield! Is this the cheapest dividend stock on the FTSE 250?

Mark Hartley considers the income potential of a FTSE 250 dividend stock that looks to be trading well below its…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

£10,000 invested in Lloyds shares 6 months ago is now worth…

Lloyds shares appear to be plateauing after surging beyond market expectations over the past year. Dr James Fox takes a…

Read more »

Portrait of pensive bearded senior looking on screen of laptop sitting at table with coffee cup.
Investing Articles

This old-school tech stock is beating all Magnificent 7 shares in 2025, including Nvidia

Shares in this old technology company are soaring in 2025, outperforming Nvidia stock and many other popular tech investments.

Read more »

This way, That way, The other way - pointing in different directions
Investing Articles

Prediction: in 12 months the under-achieving Legal & General Group share price could turn £10k into…

Harvey Jones expected better from the Legal & General share price, but he has no complaints about the FTSE 100…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

See the latest BP share price and dividend forecasts

Harvey Jones examines the outlook for the BP share price after what's been a tough year. The yield's climbed nicely…

Read more »