Take the examples of James Halstead (LSE:JHD), Wynnstay Group (LSE:WYN), and YouGov (LSE:YOU). These ‘secret’ dividend heroes attract far less attention than FTSE 100 and FTSE 250 stocks. However, each offers market-bending dividend yields as well as long records of dividend growth.

Come see why these dividend shares demand serious attention today.

Flooring it

James Halstead is one of the London stock market’s best dividend growth stocks. Cash rewards have risen every year for the last 49 years. Today, its dividend yield is an enormous 6.7% for this financial year (to June 2026). For fiscal 2027, it rises to 6.9%.

Halstead works in a highly cyclical industry, supplying flooring for commercial and residential properties. This means profits can come under pressure when economic conditions worsen. With the Iran war continuing, what can we expect?

Further share price volatility is possible, but I’m confident Halstead can keep hiking dividends. Its operations are highly cash generative, helped by the healthy margins of its specialist flooring products. It also has zero debt on the balance sheet, giving it greater financial flexibility than most other dividend-paying shares.

Another high dividend yield

Wynnstay also enjoys the benefit of net balance sheet cash. As of December, it had net cash of £25.7m. This supported another year of dividend growth, marking 2025 the 22nd straight year of increases.

What else makes Wynnstay such a reliable dividend share? One part is the defensive nature of its operations. It sells animal feed, fertiliser, and seeds, and provides agricultural services. Farming doesn’t stop when recessions hit, so revenues remain relatively stable.

One threat looking ahead is rising costs as broader inflationary pressures increase. But on balance, I think Wynnstay’s in good shape for further dividend growth. Analysts share my optimism, meaning a FTSE 100-beating dividend yield of 5.3% for this financial year (ending March 2027), rising to 5.5% next year.

What about YouGov?

YouGov’s record of consistent dividend growth goes all the way to 2013. This is thanks in part to its expanding market — more and more businesses use data to influence their decision making and marketing activities.

That’s not all. The company has low capital expenditure requirements, meaning robust cash flows. Meanwhile, its subscription-based services model generates ‘sticky’ revenues it can use to pay dividends.

The question is, can it keep growing payouts as economic pressures grow? There is clear risk, but hefty dividend coverage provides a wide margin of error. This ranges from 2.4 to 3.6 times for the next two financial years.

YouGov’s dividend yield is a Footsie-topping 3.3% for this fiscal year (to July 2026). It improves to 3.5% for next year.

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But according to experts, a single person needs an income of £13,400 to provide for a basic retirement. For those seeking a moderate standard of living in old age, £31,700 is required. Worryingly, this is £19,152 more than the State Pension.

However, by using a Stocks and Shares ISA, I reckon it’s possible to make up this shortfall (and more). Let me explain.

What do the numbers look like?

An ISA worth £209,133, paying dividends at 6%, would generate £12,548 a year. Add this to the full State Pension and it could provide a retirement income of £25,096.

To generate £19,152 – which would give £31,700 when combined with the maximum State Pension — a retirement pot of £319,200 is needed.

How might this be achieved? By way of example, investing £266 a month for 25 years, growing at 7% per annum, could build an ISA of £209,133. Increasing this to £406 would produce an ISA valued at £319,200.

But is it really possible to earn 6% in dividends each year? I think so.

Lots on offer

There are presently (26 April) 89 UK stocks offering a yield of 6% or more. Obviously, dividends cannot be guaranteed. And in some cases a high yield could be a warning sign that it’s unsustainable.

However, companies with low debt levels, limited capital expenditure requirements, and strong cash flows are well placed to return a significant proportion of their profit to shareholders.

And if they’re in a stable industry where rapid growth is unlikely, their share prices often trade at relatively low levels and their yields remain above average.

Such as?

One company that meets this description is James Halstead (LSE:JHD). As a global manufacturer and supplier of flooring to commercial and residential customers, it tends to fly under the radar. Yet its current dividend yield of 6.4% is worthy of a few headlines.

Apply this to a £209,133 ISA and it would produce a healthy income of £13,385 a year.

Impressively, after first returning cash to shareholders in 1979, it’s increased its payout every year since.

However, it’s struggled since the pandemic. Both the group’s costs and the spending power of its customers were affected by post-Covid price rises. Of concern, the current Middle East conflict raises the spectre of inflation picking up again.

And with a market-cap of £570m it’s a relatively small company, which makes it vulnerable to a prolonged downturn.

Final thoughts

But its recent woes mean its share price has drifted lower and – relative to earnings – become much cheaper.

For the year ended 30 June 2025, the group reported earnings per share of 9.7p, giving a historic price-to-earnings (P/E) ratio of 14.1. This is comfortably below its five-year average (median) of 19.5.

In light of this, I think now could be a good time to consider taking a position. Despite its recent challenges, the group has no debt and continues to earn a healthy margin. It also has a global customer base. And then there’s its impressive dividend history.

I think the flooring market and James Halstead’s share price will pick up soon. If I’m right, the stock’s attractive yield might not be on offer for much longer.

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But with the business entering into one of the toughest trading environments seen in years, the stock’s taken a bit of a beating, down by over 50% in the last five years. But as a result, the dividend yield is now a tasty-looking 7.2%. And with just £1,000, an investor can snap up roughly 813 shares right now.

So what’s going on? And could this secretly be an excellent time to think about buying?

What happened to James Halstead?

While most investors may not be familiar with the James Halstead brand, there’s a good chance they’ve stood on one of its products. The company manufactures commercial vinyl flooring. That’s the stuff you’ll find on the floors of hospitals, schools, airports, hotels, offices, warehouses, and other types of commercial properties.

And having been in business since 1914, the company has established itself as a leading global supplier in its niche.

Unfortunately, the company’s fallen upon hard times of late. While the pandemic helped spark a construction and refurbishment boom, demand in the years since has been far softer. Why? Because higher interest rates resulted in project delays and lower building activity.

Skip ahead to 2026 and, sadly, those headwinds continue to persist, with new ones thrown on top.

James Halstead’s vinyl-based flooring products are manufactured from PVC – a type of plastic derived from petrochemicals. And with the conflict in the Middle East causing massive disruptions to global oil & gas supply chains, the company’s suffering from unfavourable inflationary effects.

The result? Both revenues and profits across the last six months of 2025 continue to be weak, weighing down on investor sentiment. And yet cash flows are still rising, as is the dividend. In fact, the income stock’s on track to deliver its 50th year of consecutive dividend hikes – an exceptional feat!

50 years of continuous dividend growth

Even with all the challenges plaguing the business, it remains highly cash generative. In fact, its latest results revealed a massive 45.8% increase in operating cash inflows from £25.3m to £36.9m.

With lower order volumes, the firm didn’t have to replenish as much inventory. At the same time, receivables from previous orders continued to roll in. And the result has been a massive uplift in cash flow conversion, despite profits moving in the wrong direction.

For income investors, this dynamic is crucial. And it signals that despite encountering challenges, James Halstead remains a healthy cash-generative business that can continue to comfortably reward shareholders with an ever-increasing payout.

Of course, that doesn’t make it risk-free. The impact of surging petrochemical prices has yet to be reflected in the group’s financials. And with energy costs on the rise, manufacturing margins look like they’re about to get squeezed.

Nevertheless, with a debt-free balance sheet, the firm appears better positioned than most manufacturers to withstand some macroeconomic turmoil. That’s why, despite what the trajectory of its share price suggests, investors may want to take a closer look at this potential hidden gem.

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It’s like planting a tree: initially, growth’s slow, but once it’s grown, it bears fruit every year.

What to look for long term

It’s good to stick to companies with a solid history of paying dividends, ideally 20+ years without a cut — that shows they handle tough times.

Check the payout ratio (under 80% is safer) and cash coverage ideally over 100%. This shows they can afford to pay dividends from profits, not debt.

Strong balance sheets matter too, with manageable debt and current assets covering liabilities. Profitable firms with net margins above 10% and ROE over 15% are more likely to keep raising payouts.

Also, don’t forget inflation — the dividend should be growing 3%-5% a year to keep pace.

Smart ways to invest

To reduce risk, diversification is key. By spreading investments over 10-20 stocks from different sectors, the chance of a large loss in one area is greatly reduced.

To maximise returns, many Britons invest with a Stocks and Shares ISA. This allows investments of up to £20,000 a year tax-free for UK residents. Over a 20-30-year period, the savings can make a huge difference.

Lastly, by reinvesting dividends, the compounding effect can supercharge portfolio growth.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Calculating returns

Considering a £10,000 investment today with a 6% yield would initially return £600 a year.

Reinvesting and assuming 3% dividend growth plus a 2% share price rise, after 30 years it could grow to £85,000, paying out £3,760 yearly (about £313 a month). Okay, that’s not much, but adding as little as £7 a day, the investment would balloon to £344,221, paying £15,132 a year in passive income.

A good dividend stock example

Commercial flooring specialist James Halstead (LSE: JHD) may not sound like a big money spinner but its products are widely used. Think hospitals, shops, factories — anywhere that needs hardwearing flooring.

The yield currently sits around 6.5% with a slightly high 90% payout ratio but sufficient cash coverage of 1.32 times. Last year, it increased its dividend by 3.35%, to 8.8p per share. Most importantly, it has a 39-year-long track record of payments — that’s what retirement investors want to see.

Last year, revenue slipped 4.7% to £262m amid weak Europe and Australia demand, but profit before tax only dipped 1.9% to £55.1m. This exhibits strong efficiency, with net margins at 15.5% and return on equity (ROE) at 22.3%. 

Still, there’s always a risk from a housing slowdown and the subsequent construction slump. When money is tight, clients often turn to lower-cost competitors, so any economic slowdown adds to this.

For now, the shares look fairly priced, trading around 133p, with a forward price-to-earnings (P/E) ratio of 13. Plus, the balance sheet looks healthy, with a ratio of 2.22 showing current assets easily cover liabilities.

Why it’s appealing for UK investors

When it comes to sustainable, inflation-beating income, James Halstead fits the bill – reliable payouts, well-covered liabilities and a wide moat in the durable flooring business.

But it’s not the only dividend stock worth considering today – lately, I’ve identified several appealing options with similar characteristics.

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For UK investors, there are some companies that come with outstanding track records of consistently returning cash to shareholders. And I think they’re well worth considering. 

Diageo

Diageo (LSE:DGE) is a stock in transition. The company has faced some challenges recently, but the compensation for this is that investors who buy the stock today get a 4.5% dividend yield. 

That’s around the highest it’s been in the last 10 years, which is worth taking note of. And the firm still has a strong brand portfolio with leading products in several categories. 

The firm has recently appointed a new CEO and is looking to tackle some of the challenges it has been facing. These include weak consumer sentiment and trends from younger drinkers.

Times are tough, but Diageo has weathered storms before. And if it can come through the other side, investors who buy the stock now could be well rewarded in terms of dividends.

Croda International

One thing that immediately jumps out about Croda International (LSE:CRDA) is that its dividend isn’t actually covered by its earnings. That’s a big risk right now. 

The market, however, knows this and is offering the stock with a 4% dividend yield right now. And no company manages to achieve 30 consecutive years of dividend growth by accident. 

In Croda’s case, it’s the result of an arsenal of patent-protected chemicals that are used in a variety of applications. In some cases, they’re even specified by regulation. 

That’s a strong position to be in. And while weak demand from end markets has been weighing on profits and cash flows recently, this might be a good time to consider buying. 

James Halstead

James Halstead (LSE:JHD) isn’t a household name, but that doesn’t mean investors should simply ignore it. And they definitely shouldn’t overlook its 49-year record of dividend growth.

The firm is a supplier of industrial flooring for specialist settings such as hospitals. These often have to met specific technical requirements and this creates a barrier to entry.

Despite this, the company has to compete with larger operators and this is a key risk. So far, though, James Halstead’s reputation for quality has allowed it to generate consistent growth.

The company’s earnings only just cover its dividend right now. But I don’t know where else investors can get a 6.5% yield with a growth record stretching back almost half a century.

UK dividends

I think the UK stock market has some interesting opportunities for dividend investors. Especially ones who are prepared to be brave in the face of short-term challenges. 

A good way of looking to limit the overall risk is by diversification. Investing across a range of stocks from different industries and geographies can reduce the impact of specific threats.

When it comes to attractive valuations and strong track records, I think the UK market is hard to beat. And that’s where I think investors should start their searches.

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Reliability’s the cornerstone here. That’s why I like to focus on stocks with long histories of paying and even growing dividends, regardless of short-term market bumps.

Two such names that stand out are James Halstead (LSE: JHD) and Value and Indexed Property (LSE: VIP). Both carry attractive yields, have decades-long dividend track records, and have proven resilient through multiple market cycles.

Of course, dividend stocks typically come with some profitability risks, but with such long histories of reliable growth these two still look attractive.

Personally, I think James Halstead’s stronger fundamentals make it the more compelling of the two, but both are worth thinking about for investors seeking passive income.

James Halstead: strong fundamentals, weak sentiment

The commercial flooring manufacturer James Halstead yields around 6% — a healthy level for investors seeking reliable passive income. The company’s raised its dividend for more than 20 consecutive years, an impressive feat in an industry that can be cyclical.

Coverage looks decent too, with a payout ratio of 86% that’s comfortably sustainable given the company’s earnings. Add in a return on equity (ROE) of 24.6% and a net margin of 15.7%, and it’s clear that profitability remains a strong point. Plus, it has a clean balance sheet and looks well-priced, with a debt-to-equity ratio of just 0.03 and a price-to-earnings (P/E) ratio of 14.

So why has the share price fallen 16.6% this year? Economic pressures have hit sales, with weaker construction activity dampening demand. Investors are nervous ahead of its FY results due on 1 October, where lower profits are expected. If those disappoint, the stock could fall further. That’s the main risk here — operational weakness translating into weaker sentiment.

A property-backed income play

Value and Indexed Property’s a closed-ended fund that invests in UK commercial property alongside small-to-medium-sized companies.

Coverage is less convincing than James Halstead’s, with a payout ratio of 96.8% and cash coverage at just 0.9 times. That means dividends are being paid right up to the limit of what earnings and cash flow allow.

While the fund remains profitable — with a net margin of 60.8% and return on equity of 6.7% — it does run the risk of overextending itself. The debt-to-equity ratio of 0.64 is manageable, but higher than I’d like to see for a property play.

The company’s also heavily tied to the health of the UK property market, which is recovering but still patchy. Thin margins and missed earnings expectations in the last two years add further pressure. A dividend cut can’t be ruled out if conditions worsen. That said, the sheer consistency of past payouts makes it an option many income investors might still consider.

But still, it currently offers a dividend yield of 6.6%, which higher than average in its sector. Importantly, it has a stellar track record with more than two decades of consistent dividend growth.

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The forecast dividend yield is now up at 6.1%. And this is a company that prides itself in having raised its annual dividends for 49 years in a row. What’s in store for income investors now?

Floor coverings

The company makes commercial and domestic floor coverings. That business has been under revenue pressure for the last few years — contributing to the share price fall since a high in early 2022.

The year ended June 2024 saw revenue drop 9.4%. And while headline profit before tax rose 7.9%, bottom-line earnings per share (EPS) fell 2%. By the interim stage of the 2024/25 year, revenue dipped a little but EPS gained 4%. It’s a bit swings-and-roundabouts.

We probably won’t have full-year results to June 2025 for another month or so. But a July trading update effectively turned into a mild profit warning, and that’s what sent the shares down on their current decline.

After sales fell in the UK the previous year, the update told us “our performance this year has seen this decline more than fully reverse“. But despite that, the company said “our internal expectations for the UK were higher“. It added “An anticipated uplift in demand in the education, healthcare and the prison sectors has not, yet, materialised“.

Business disruption

We also heard of “disruption to global trade routes and shipping movements with the uncertainty of tariffs on sales into the USA which has affected deliveries into many markets“. That’s a familiar tale this year. But at least for James Halstead there was a silver lining — a competitive advantage in the US compared to suppliers from other countries facing higher tariffs.

The big question is whether to take advantage of the price dip and consider buying, or wait and see if the business picks up in the longer term.

The crux for me is all down to the dividend. Cover by forecast earnings this year is looking a bit thin at only around 1.1 times. I also see a risk the payout might not be covered by free cash flow. So the company could have to draw on its cash resources if it wants to keep its progressive rises going. If it doesn’t, I could see a share price slump.

Next few years

That’s just this year. And I reckon we could have another two or three years of relatively weak trade in this business. Amid rising prices and an uncertain economic outlook, flooring is the kind of spend that can be shelved relatively easily in favour of higher priorities.

Still, James Halstead had £63.7m cash at the halfway stage. And I expect it will surely prioritise that 49-year tradition of raising dividends. Investors who agree could do well to consider buying while the price is down, and lock in higher effective yields.

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That’s the picture I’m seeing when I look at James Halstead (LSE: JHD), after a 38% share price fall in the past five years. But a fallen share price isn’t a good thing. It depends on the reason, and whether it’s something that could halt those dividend rises.

Anything wrong?

James Halstead is in the thoroughly unexciting business of industrial flooring. And it looks like it’s something of a market leader. With some of its products used in hospitals to the exclusion of competitors, I see a bit of a defensive moat.

The recent share price weakness has come since early 2022. That’s been a period of high inflation and interest rates, and a very shaky economic outlook. For the year ended June 2024, the company reported a 9.4% fall in revenue.

But that softened to a bottom-line 2% fall in earnings per share (EPS) to 10p. And it was still enough to cover the 8.5p full-year dividend. It’s not strong cover, but in a business downturn, seeing anything positive is good.

The company was rightly proud of its “unbroken chain of dividend payment increases from 1974.”

Looking up

By the current financial year’s halfway point at 31 December 2024, we saw a 4.7% decline in revenue from the same period a year previously. That’s slowing, and EPS actually rose to 5p in the half. The interim dividend? Up again, by 10% to a record 2.75p per share. We could be on for 50 years.

Executive Chairman Mark Halstead spoke of a “backdrop of difficult markets” and “short-term confidence weakness in Europe.” But he also reported “raised profits underpinned by improved margins and reductions in overheads.“

Oh, and note his name. I do like it when a company’s founding family is still at the helm.

Risky business?

A few things mean caution is needed here. We’re looking at a forecast price-to-earnings (P/E) multiple of 15, which isn’t an obviously screaming cheap valuation. And with the company listed on the Alternative Investment Market (AIM), it doesn’t attract many analysts.

In fact, I can find only two offering recommendations, one Buy and one Hold. Still, there’s an average share price target on the stock of 300p. At the time of writing, James Halstead shares are selling for 159p. That’s a healthy growth expectation.

Dividend cover is a bit thin. And if it’s not enough one year to lift the dividend yet again, I could see a share price slump. And we’re not out of the economic woods yet.

On balance, I’d say the revenue and share price weakness has been due to cyclical economic issues. And I see no fundamental problem with the company itself. It’s on my list of passive income stocks to consider for my ISA.

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The firm manufactures and distributes industrial flooring. And while things are tough in the industry at the moment, this could be the time to consider buying shares in a quality business.

Industrial flooring

Industrial flooring doesn’t seem particularly exciting. And compared with a lot of things – or indeed, almost all other things – it isn’t, but this can be a good thing when it comes to dividend stocks.

Sometimes, businesses that aren’t particularly high-octane can be durable and resilient investments. And that’s been the case with James Halstead. 

The company’s Polyflor brand sets the standard in industrial flooring. Its products are known for their high levels of slip-resistance, durability, and the ability to withstand regular clearing.

In some cases, such as hospitals, these characteristics are even specified by regulation. This creates a barrier to entry for competitors and helps James Halstead maintain its leading market position.

Why has the stock been struggling?

Despite some clear strengths, James Halstead’s share price has been struggling in 2025. And the reason for this is that sales have been unusually weak. 

In its January trading update, the firm reported a decline in revenues compared to the year before. Management attributed this to weak customer confidence in a difficult environment.

Despite this, the company did offer some encouraging guidance for investors. It identified a backlog of repairs and renewals in healthcare and education as strong signs for future growth.

I think that gives some reason for optimism going forward. Specifically, it suggests that the challenges James Halstead is facing are cyclical, rather than permanent. 

Long-term investing

From a long-term perspective, I’m not concerned about the current environment – in fact, I see it as a potential buying opportunity. But there is something else that I’m mindful of.

Over the last 10 years, James Halstead has distributed roughly 75% of its net income. Given this, the fact it has managed to increase its dividend by around 60% is quite impressive.

There is, however, something that I think is worth keeping an eye on. Since 2015, the return on equity (ROE) the company generates has been declining steadily from 33% to 23%.

This is a sign the firm hasn’t managed to be as efficient with the cash it has retained as it was a decade ago. And that’s something investors should keep an eye on.

A stock to consider buying

To my mind, James Halstead is a quality business that doesn’t get the attention it deserves. And that’s a good combination from an investment perspective. 

As far as I can see, only one analyst covers the stock and has a price target 117% above the current level. I’m not sure I’d go that far, but I definitely think it looks attractive.

The dividend yield is approaching 6% and that’s unusually low for this stock. With that in mind, I think passive income investors should seriously consider buying it at today’s prices.

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More seriously, there’s quite a bit to the chancellor’s latest spending plan for investors to take note of. And this could be big news for a couple of UK shares that investors might ordinarily overlook.

FW Thorpe

FW Thorpe (LSE:TFW) provides industrial lighting systems. And while this sounds about as exciting as a lecture on the history of tax law, there’s actually quite a bit to catch the attention of smart investors.

The firm focuses on areas where requirements are technically complicated or specific. This creates a barrier to entry for competitors and allows the business to maintain some strong operating margins.

Emergency lighting’s one example. Whether it’s an expansion at Heathrow Airport or the building of a new cancer hospital in Cambridge, this is more complicated than screwing in some energy-efficient bulbs.

Emergency systems need to be able to deploy instantly in the event of a power failure and stay on for a certain amount of time. And FW Thorpe has the technical expertise to provide this.

One of the risks with this business is that it depends on continued investment into UK industry. Whether it comes from the government or the private sector doesn’t matter – but it can’t be guaranteed.

Sales growth has stalled in the last year or so and the stock’s fallen almost 20%. But this could pick up as the chancellor’s investments take shape and I think the stock’s well worth a look for investors.

James Halstead

The idea behind James Halstead‘s (LSE:JHD) similar. The company manufactures and distributes commercial flooring, which also sounds as exciting as reading a 500-page photocopier manual. 

Again though, the firm focuses on specialist products that go into environments that have specific requirements. Hospitals, for example, can’t just stick down some bathroom vinyl and be done with it.

James Halstead has a product that can be welded at the seams to create a completely sealed surface. This prevents bacterial growth and meets the demanding hygiene standards hospitals maintain.

Equally, airport floors need something a bit tougher than the average lino. And the company’s developed flooring that can deal with high foot traffic, rolling luggage, and constant cleaning.

Along with shifting construction output, the firm’s reliance on PVC as a raw material makes it vulnerable to rising oil prices pushing up costs. That’s a risk investors need to seriously consider.

Despite this, James Halstead’s closing in on 50 years of consecutive dividend growth. And with a current yield of almost 5%, I think it could be one for passive income investors to consider. 

Boring’s beautiful

On the excitement scale, emergency lighting and non-slip floors are so far behind artificial intelligence (AI) and anti-obesity drugs that it’s not even funny. But investors shouldn’t overlook these boring stocks.

FW Thorpe and James Halstead have strong competitive positions that are difficult to disrupt. And I think the chancellor’s plans for investing in the UK could give them both a boost.

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