I asked ChatGPT for the 3 best UK dividend shares for 2026, and this is what it said…
What did ChatGPT plump for when I asked it to find some top dividend shares as options for 2026?
The first two come as no shock, as it’s really just doing a data search for what’s already been written. And I’d say they’re both solid stocks well worth considering. But the third choice surprised me a little.
Cash cow
BP (LSE: BP.) has been a popular dividend pick for years, as it’s been a true FTSE 100 cash machine. There’s a 5.8% dividend yield on the cards for this year — and analysts see it rising strongly over the next couple of years too.
The stock has been a bit volatile in the past few years, and it’s all about energy transition. Politics has swung from hydrocarbons, to pushing renewable energy hard, and back to oil and gas again. Global energy policies will surely be modified in the coming years, and investors need to be aware of that.
Oil prices are falling back too as hopes faintly glow for an end to the war in Ukraine. So there’s commodity cycle risk too. But BP is firmly on my dividend shares candidate list.
Dividends plus growth
Aviva (LSE: AV.) has done well for me. I’ve had some nice dividend cash, and there’s a 5.6% yield forecast. And cover by earnings looks decent too.
Aviva has also provided the share price growth I hoped would come from the insurance giant’s turnaround strategy. The Aviva share price has more than doubled in the past five years.
I think it’s probably about fair value now with a forward price-to-earnings (P/E) ratio of close to 14. And maybe that’s even a bit high considering the cyclical risk that comes with a stock like this — but probably not by much. And future dividends depend on investment returns too — though I wouldn’t be buying shares if I didn’t expect those to grow over the long term.
I reckon investors who follow ace investor Warren Buffett‘s advice to seek great companies at fair prices should consider Aviva, because that’s how I rate it.
Blowing in the wind
Real estate investment trust Greencoat UK Wind (LSE: UKW) is the dividend share choice I wasn’t expecting. Renewable energy has lost its drive of late. And forecasts show Greencoat continuing with losses this year. So it’s not the kind of cash cow I like best for dividends.
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Still, forecasts do indicate profit in 2026. And there’s a whopping 10% headline dividend yield predicted by some analysts. The trouble is, real investors have to look deeper than the headlines. And forecast earnings even out to 2027 would only barely cover that yield.
With around £1.9bn net debt on the books, the cash isn’t there for me to want to buy Greencoat for dividends now. I do, however, see a good chance of dependable dividends in the future. But investors might want to consider holding off a bit, until we see the colour of the cash.
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Alan Oscroft has positions in Aviva Plc. The Motley Fool UK has recommended Greencoat Uk Wind Plc. 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.
