I asked ChatGPT to name the UK’s top dividend stocks – it picked 5 stunning high-yielders

Harvey Jones decided to supplement his own stock-picking intelligence with the artificial version. His chatbot of choice named five top FTSE 100 dividend stocks .

| 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.

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper

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.

After spending hours sifting through the FTSE 100 to find Britain’s best dividend stocks, I decided to call in some artificial help.

I was curious to see what generative artificial intelligence chatbot ChatGPT would come up with, but was instinctively suspicious. Wouldn’t it just pick the five biggest yielders and be done with it?

I’m not privy to its algorithms but it’s clearly a bit more sophisticated than that. Although I wouldn’t describe any of its picks as a surprise. They’re all big blue-chips with mighty yields. So which passive income faves did my new ‘bot pal come up with?

Should you invest £1,000 in Aston Martin right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aston Martin made the list?

See the 6 stocks

Are these really the UK’s best income shares?

Well knock me down with an artificial feather but cigarette maker British American Tobacco was on the list. I’ve just finished writing an article highlighting its fabulous trailing yield of 7.95%.

This isn’t a one-off as ChatGPT pointed out: “The company has a history of consistent dividend payments, making it appealing to income-focused investors.”

British American Tobacco has survived the regulatory onslaught on cigarettes by building market share, sweating its brands and pursuing smokeless alternatives. Even its shares have picked up, climbing 25% in the last year. I can’t really argue with this.

It’s impossible to argue with my robot buddy’s next dividend pick either: HSBC Holdings (LSE: HSBA). I don’t hold the Asia-focused bank, but it’s at the top of my Buy list for when I have some cash.

ChatGPT says: “As one of the world’s largest banking institutions, it has a track record of regular dividend distributions.”

The current yield is 6.26% while the HSBC share price is up 22% over the last year. Yet it’s still cheap, trading at just 8.42 time earnings.

HSBC has challenges. Listed in London but generating the bulk of its profits in Asia, it’s tangled up in US-China trade wars. It’s hard to see how that will play out as President-elect Donald Trump talks of tariffs. New CEO Georges Elhedery is responding by splitting the group into Eastern and Western units.

I think it’s a brilliant income stock

HSBC has also been lavishing investors with share buybacks. They totalled £7bn in full-year 2023 financial year. Nice work, ChatGPT.

It also picked out mining giant Rio Tinto, which has a bumper trailing yield of 7.43%, although as my AI chum warned: “Dividend payments can be influenced by commodity price fluctuations.”

How true. I’ve suffered at the hands of Glencore lately, so won’t be buying Rio Tinto. It’s still a top dividend stock though and cheap at 8.03 times earnings.

I won’t buy its next suggestion either, energy giant Shell, but that’s purely because I hold rival BP. Shell’s yield is relatively modest at 4.6% but it’s also been engaging in share buybacks.

The one chatbot pick I do hold is Legal & General Group. It has a bumper yield of 9.29%. So it turns out that I’m the one chasing the big yielders, not AI. Perhaps my algorithms need a reset.

ChatGPT says Legal & General “is known for its consistent dividend payments”. I’d add it’s also known for its underperforming share price, but I’m hoping that will change.

Even though I can’t fault ChatGPT’s stock pick, I’ve still got doubts about its selection process. But I’d happily buy any five of these FTSE 100 dividend heroes today.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

Harvey Jones has positions in Legal & General Group Plc. The Motley Fool UK has recommended British American Tobacco P.l.c. and HSBC Holdings. 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

Investing Articles

Up 30% in weeks, does the BAE Systems share price still offer value?

The BAE Systems share price has been on a tear over the past couple of months. This writer sees limited…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Hunting for shares to buy as the market trembles? Remember this!

After a choppy week in global stock markets, our writer goes back to basics in his hunt for bargain shares…

Read more »

Investing Articles

3 simple principles to help build wealth in an ISA

As a new tax year opens up new ISA allowances for many investors, our writer shares a trio of things…

Read more »

Investing Articles

US trade tariffs: what they could mean for UK shares like Ashtead, Compass Group, and Experian

US trade tariffs continue to rock global markets, and the UK is no exception. Our writer considers how a new…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Dividend Shares

The Trump slump has smashed these FTSE 100 shares!

After a rough week for US and UK shares, investors have been shaken. But now these FTSE 100 stocks have…

Read more »

Investing Articles

£10,000 invested in Rolls-Royce shares 5 years ago is now worth…

Rolls-Royce shares have been on fire since April 2020. Part of this is the result of pandemic restrictions lifting, but…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

£10,000 invested in Tesla stock at its peak in 2024 is now worth…

Over the last few months, Tesla stock has lost nearly half its value. Here, Edward Sheldon explores a few takeaways…

Read more »

Investing Articles

Is the S&P 500 heading for an epic stock market crash?

Our writer shares his thoughts on a very crazy time for the S&P 500 and the wider stock market. How…

Read more »