Are these the best FTSE 100 dividend stocks to watch in February 2026?

Best FTSE 100 dividend shares to watch

2025 was a banner year for the FTSE 100, as the index outperformed the S&P 500 for the first time in almost a decade. 2026 began well as the price climbed above 10,000 for the first time and continued to hit new record highs.

The strength in metals prices, and particularly in precious metals, has been a major contributor to the move, driving the heavyweight mining sector high. Merger activity helped too, as mining giants Rio Tinto and Glencore renewed discussions about a tie up. The

These shares are strong yield plays, and have shown the strongest five-year dividend growth, with a dividend cover ratio of 1 or higher as of January 2026. Remember: they may not be the best investments, and the dividends and capital itself are not guaranteed.

NatWest Group (NWG)

NatWest Group PLC is positioned as a domestically focused UK bank offering a balance between income generation and strong dividend growth. Earnings have been supported by higher interest rates, which lifted net interest income, while a relatively simple business model has helped keep costs and risk contained.

Capital ratios remain strong, allowing the bank to maintain dividends alongside buybacks. Dividend cover of 2.59 indicates a reasonable buffer against earnings volatility, the highest on this list and a sign of financial strength.

Over time, interest rate cuts could reduce margins, placing more emphasis on volume growth and cost discipline. Credit quality and the health of the UK economy remain important variables, given NatWest's concentration in retail and commercial banking.

The gradual reduction of government ownership has improved flexibility but does not materially change the underlying investment case. Overall, NatWest fits a yield-plus-growth approach through stable cash generation rather than rapid expansion.

NatWest Group weekly candlestick chart

Howden Joinery Group (HWDN)

Howden Joinery Group PLC is a kitchen and joinery manufacturer supplying trade customers across the UK. The business model centres on a depot network serving builders and contractors, creating sticky customer relationships and repeat business.

The 40.3% five-year dividend growth reflects strong cash generation and a progressive dividend policy. Dividend cover of 2.19 provides substantial headroom, suggesting management has confidence in maintaining growth even if housing market conditions weaken.

The group's performance is tied to UK housing activity, both new builds and renovations. A slowdown in either would impact volumes, though the trade-focused model offers some insulation from consumer sentiment compared to retail-focused competitors.

Howden has demonstrated pricing power and operational discipline, helping protect margins through inflationary periods. The lower yield compared to other names on this list reflects the market's recognition of quality and growth potential, rather than just current income.

Howden Joinery Group weekly candlestick chart

J Sainsbury (SBRY)

J Sainsbury PLC provides income supported by relatively defensive cash flows from food retailing. While margins remain thin, the group has focused on price competitiveness, efficiency and customer loyalty to protect volumes against fierce competition from discounters.

The Argos business adds diversification, though grocery remains the main earnings driver. At 4.7%, Sainsbury's offers the highest yield on this list, reflecting both the competitive pressures facing UK supermarkets and the market's cautious view on growth prospects.

Dividend cover of 1.59 suggests payouts are supported but not overly conservative, meaning dividend growth is likely to be steady rather than strong. Inflation easing could offer some margin relief, though competitive pressure across UK food retail is likely to persist.

Capital allocation has been cautious, with a focus on maintaining balance sheet strength. Sainsbury's role in a yield-focused portfolio is primarily defensive, offering income stability with limited growth rather than significant upside potential.

J Sainsbury weekly candlestick chart

Games Workshop Group (GAW)

Games Workshop Group PLC is a niche player in tabletop gaming, producing miniatures, paints and accessories for its Warhammer franchise. The business has built a loyal global customer base through a combination of product quality, storytelling and community engagement.

The 29.1% five-year dividend growth is impressive for a company in the consumer discretionary sector, reflecting consistently strong cash generation. The group operates a simple model with high margins, limited capital requirements and direct distribution channels.

Dividend cover of 1.48 is the lowest among the new additions to this list, though still comfortably above one. Management has shown willingness to pay special dividends when cash builds up, adding to the total shareholder returns.

The main risk is the concentrated nature of the business. Games Workshop relies heavily on the Warhammer IP and faces competition from video games for leisure time and spending. However, the tangible, social nature of tabletop gaming has proven resilient.

Games Workshop Group weekly candlestick chart

Whitbread (WTB)

Whitbread PLC combines income with more cyclical growth exposure through its Premier Inn hotel business. Trading has improved as travel demand normalised, supporting the reinstatement and gradual growth of dividends following cuts during the pandemic.

The 3.5% yield sits in the middle of this group, reflecting the balance between defensive income and growth potential. Dividend cover of 1.47 allows for modest dividend progression while funding the expansion of Premier Inn in Germany.

The UK business benefits from strong brand recognition and scale, though earnings remain sensitive to consumer spending and cost inflation, especially wages. A prolonged economic slowdown would likely impact both leisure and business travel.

Over time, easing cost pressures and operational efficiencies could support further dividend growth, but returns are likely to fluctuate with the economic cycle. Whitbread contributes diversification within an income portfolio by adding exposure to leisure and hospitality.

Whitbread weekly candlestick chart

How to invest or trade in FTSE 100 dividend stocks

1. Learn more about FTSE 100 dividend stocks
2. Decide whether you want to trade or invest
3. Open an account 
4. Search for your chosen stock on our web platform or app
5. Make your investment or trade

When you invest in a share, you buy it outright with the view that it’ll increase in value over time.

Trading takes a more short-term view where you look to take advantage of smaller market movements. It involves leverage, which allows you to take a position that’s larger than your initial deposit. This means market movements are magnified, and you could gain or lose money faster than expected.

For example, if you trade with 5:1 leverage, you could place a £1000 deposit and manage a £5000 position. A 10% increase or decrease in the market could result in 50% profit or loss on your initial margin.

Negative balance protection will prevent you from losing more than your initial deposit, but market movements can be fast and unpredictable, and you could lose your full deposit.