Is Lloyds Banking Group PLC (LYG) A Top UK Growth Dividend Stock to Consider Amid Underlying Growth?

Lloyds Banking Group PLC (NYSE:LYG) is a top UK dividend growth stock to consider. On June 30, Morgan Stanley reiterated an overweight rating on the stock and hiked the price target to 135 GBp from 125 GBp. The price target hike comes on the heels of the company's dividend growing at a compound annual growth rate of 43.49% over the past five years.

The company started the year on a roll, characterized by income growth and cost discipline, which has allowed it to deliver strong profitability. The differentiated business model remains resilient amid economic uncertainties, as depicted by Statutory profit before tax of £2.0 billion for the first three months of the year. Return on tangible equity stood at 17% in the first quarter.

For the full year, Lloyds Banking Group expects net interest income to exceed £14.9 billion with return on tangible equity of more than 16%. Given higher-than-expected expectations, the company expects structural hedge income to grow by more than £1.5 billion to £7 billion by year-end. It is also expected to rise to £8 billion by 2027.

Lloyds Banking Group PLC (NYSE:LYG) is a leading UK-based financial services organization operating through three core divisions: Retail Banking (checking, savings, and mortgages), Insurance, Pensions and Investments, and Commercial Banking.

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