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Yahoo
6 days ago
- Business
- Yahoo
Here are the latest dividend yield forecasts for Legal & General, Aviva, and M&G shares
Financial stocks like Legal & General (LSE: LGEN), Aviva (LSE: AV.) and M&G (LSE: MNG) have been great sources of income in recent years. At times, they've been offering dividend yields of up to 10%. Interested to know how much income could be on offer from these stocks in the years ahead? Let's take a look at the latest dividend forecasts for these three FTSE 100 shares. Legal & General Starting with Legal & General, it's forecast to pay out 21.7p per share in dividends for 2025 and 22.2p per share for 2026. At today's share price of 256p, that puts the forecast yields at 8.5% and 8.7%. Now, they're obviously attractive yields and more than double what most high-interest savings accounts are paying these days. However, there's no such thing as a free lunch in the investing world. So what are the risks here? Well, one is turbulence in the financial markets. This could affect the value of assets the insurer has on its balance sheet and lead to operating losses (and potentially share price losses). Another is less demand for pension risk transfer solutions. It's worth noting that analysts at RBC just downgraded the stock to Underperform from Sector Perform and cut their price target to 220p on the back of concerns here. Personally, I think the stock's worth considering for income today. However, investors do need to acknowledge that there are some risks here and that share price weakness could offset any income received. Aviva Turning to Aviva, it's forecast to pay out 38.1p per share for 2025 and 40.8p per share for 2026. At today's share price of 636p, we have prospective yields of 6% and 6.4%. These yields aren't as high as Legal & General's, but they're still attractive. The average forward-looking yield across the FTSE 100 right now is about 3.2%. So Aviva's offering nearly double that. The risks here are quite similar to Legal & General's. In relation to pension risk transfer, the company actually advised recently that volumes this year are likely to be lower than in 2024. One other thing worth highlighting here is that the stock's had a very strong run in 2025. Year to date, it's up about 35%. I think it's still worth considering as an income play. But bear in mind that after that kind of run, it could be subject to some profit taking. M&G Finally, zooming in on M&G, analysts expect payouts of 20.6p and 21.1p per share here. Given that the share price is sitting at 259p, we have yields of 8% and 8.2%. I see this stock as a bit of an undiscovered income gem. It's not nearly as popular as stocks like Legal & General and Aviva, but its yield's excellent. It also has a good track in terms of dividend growth. Since it was spun off from Prudential in 2019, it's increased its dividend every year. Again, turbulence in the financial markets is a risk factor here. It's worth noting that this stock can be quite volatile at times. Yet I see quite a bit of appeal. In my view, it's worth considering for income. The post Here are the latest dividend yield forecasts for Legal & General, Aviva, and M&G shares appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Edward Sheldon has positions in Prudential and London Stock Exchange Group. The Motley Fool UK has recommended Prudential and M&g 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. Motley Fool UK 2025
Yahoo
6 days ago
- Business
- Yahoo
How much passive income can you potentially earn by investing £500 a month?
Investing in the stock market is a fantastic way to build a passive income, especially since, in 2025, it doesn't take that much money to get the ball rolling. Perhaps one of the most widely discussed strategies is finding and buying shares which pay chunky dividends. And with UK stocks having some of the most generous dividend policies in the world, it's easy to see why this approach is so popular. But realistically, how much money can investors expect to make with only £500 a month to work with? Let's explore. Setting expectations On average, the most mature and established large-cap stocks in Britain have offered a dividend yield of around 4%, while also delivering another 4% in capital gains. This translates into an 8% total return. And investing from scratch with £500 a month at this rate for 30 years, on paper, produces a £750,000 portfolio. Assuming the yield's still the same 4%, that's a passive income of £30,000 a year. And while market volatility may cause this to be higher or lower than expected, it's a reasonable expectation when working on a time horizon of three decades. But what if investors exclusively focus on the stocks which offer more than 4% in annual dividends? What about a company like Legal & General (LSE:LGEN) with its massive 8.3% yield? Well, if it still produces a 4% annual capital gain, not only would the previous portfolio grow to a whopping £1.8m, but the yearly passive income would reach £155,000! Too good to be true? There's no denying that the prospect of potentially earning over a 150 grand without having to lift a finger is exciting. But let's be smart and look at the risks as well as the potential rewards. An 8.3% yield's pretty substantial. Yet it can actually be a warning sign to stay away since this level of payout's exceptionally difficult to maintain. In the case of Legal & General, there are a variety of justifiable concerns surrounding this business. The higher interest rate environment has certainly worked wonders in boosting the firm's revenue and earnings. Yet the company's still paying out more in dividends than it's actually bringing in when looking at the payout ratio. Needless to say, that's not sustainable in the long run. Even more so if the company starts writing badly-priced insurance policies. Don't forget, as a life insurance business, the firm's issued policies can last for decades. And the consequence for misjudging future payouts can be enormous over time. Having said that, management's attempting to improve the coverage situation through structural simplification, merging some divisions while disposing of non-core ones. While interest rates have started to tick down, the bulk purchase annuity market remains strong, giving the group a nice tailwind to piggyback. And if everything goes according to plan, not only would dividend coverage improve, but payouts could rise as well. The bottom line Overall, Legal & General shares present a lucrative dividend opportunity for investors willing to take on considerable financial and macroeconomic risk to consider. As things stand, the risk's too high for my tastes. But the good news is there are plenty of other high-yield opportunities for investors to explore on their journey to building a chunky passive income. The post How much passive income can you potentially earn by investing £500 a month? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025
Yahoo
20-07-2025
- Business
- Yahoo
In 12 months, a £10,000 investment in Legal & General shares could become…
I've long argued that Legal & General (LSE:LGEN) shares are one of the FTSE 100's best bargains. It seems that the market is waking up to its brilliant value, too — the financial services giant is up 10.4% since the turn of 2025. That's better than the broader Footsie's 8.4% rise. £10k becomes… I bought Legal & General shares in April 2024, and recent price strength means I've eked out a 1.2% capital gain. It was recently trading at 254p per share. Combined with dividends received in that time, my total return is 15.2%. I'm delighted to say that City analysts are confident its price will continue heading northwards. Twelve brokers currently have ratings on the company, and their consensus opinion is that shares will rise to 270.8p. That's a rise of 6.6% from today's levels. That's not the only reason I'm excited, either. Legal & General has a great reputation for large and growing dividends, and its forward yield is currently 8.6%, well above the FTSE 100 average of 3.5%. This all suggests investors today will enjoy a juicy 15.2% total return over the next year. To put that in monetary terms, £10,000 of shares bought today will turn into £11,520, 12 months from now. Profits jumps Profits have recovered strongly more recently, and forecasters are confident this will continue as the strain on consumer spending eases. Driven by improvements at its Retail and Institutional Retirement units (up 7% and 12%), core operating profit at group level rose 6% last year to £1.6bn. Total pre-tax profit rose to £542m, up from £192m in 2023. And analysts suggest it will swell again in 2025, to £18bn. City brokers are confident a series of sustained interest rates this year and beyond will support further sales and profits growth. In the FTSE firm's core UK marketplace, the market's still pricing in another two interest rate cuts in 2025 alone, taking the base rate to 3.75% from 4.25% today. Interest rate reductions are also expected in the company's fast-growing international regions like the US. These bright profit estimates aren't just down to central bank support, howeverr. They also reflect long-term sector growth as people in its markets rapidly age, and the onus on shrewd financial planning becomes greater. Analysts at RBC expect, for instance, the bulk annuity market to keep growing rapidly. In the UK, this is tipped to grow from £46bn-£49bn last year, to £60bn in 2025/26. Reflecting this opportunity, brokers think Legal & General's pre-tax profits will rise to £1.9bn next year. They're tipped at £2.1bn in 2027, too. Considering Legal & General There are threats to these forecasts, one of which is an inflationary surge that could impact the direction of interest rates. A long-term danger is the high degree of industry competition, which may compromise revenues growth, not to mention profit margins. Yet, on balance, I believe Legal & General has the scale, the expertise, and the market opportunity to grow earnings significantly over the next decade. Today, it trades on an undemanding forward price-to-earnings (P/E) ratio of 10.9 times, making it worth serious consideration at today's price. The post In 12 months, a £10,000 investment in Legal & General shares could become… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025
Yahoo
13-07-2025
- Business
- Yahoo
See what £10k invested in Legal & General shares in January is worth today
Legal & General (LSE: LGEN) shares have been underwhelming for years, especially next to FTSE 100 rival Aviva. The share price is up 8% in the last year, broadly in line with the index average. Over five years, it's up less than 15%. The FTSE 100 has climbed a punchy 47% over the same period. So that's severe underperformance. Aviva has trounced them both, with gains of 28% over one year and 135% over five. So I understand why people might not rate Legal & General. As an investor, I'm disappointed myself. Still, it remains one of the FTSE 100's most popular income stocks, and with good reason. It hasn't cut its dividend since the financial crisis (it froze it during the pandemic). But it still faces a string of challenges including sticky inflation, relativley high interest rates and a sluggish asset management arm. Legal & General Investment Management has also struggled due to mixed performance in volatile stock markets. Management still needs to sharpen up its act. In March, the company reported a 6% rise in 2024 core operating profits to £1.62bn. On Thursday (10 July), it announced a partnership with Blackstone, aimed at strengthening its annuities and global asset management propositions. Earnings per share have fallen in the last three years, pushing the price-to-earnings ratio to an eye-watering 87. Aviva looks pricey too, but its P/E of 26 is much easier to justify. Given these circumstances, the Legal & General dividend is doing plenty of heavy lifting. The yield stands at 8.45%, the third highest on the index. It looks secure, with management committing to lift it 2% a year from 2025 to 2027. Not spectacular, but steady. The board plans to return £5bn to shareholders over the next three years via dividends and share buybacks. That's equal to around 40% of its market value. Despite the noise, Legal & General shares have quietly risen 9.6% so far in 2025. That's a shade better than the FTSE 100, which is up 8.25%. So a £10,000 investment would now be worth £10,960. But that's not all. On 2 January, the stock traded at 230p. So a £10k investment would have bagged 4,348 shares. On 5 June, shareholders received a dividend worth 15.36p per share. That would have earned our investor £668, lifting their total holding to £11,628. And there's more to come. An interim dividend is due on 26 September. If that rises 2% from last year's 6p, it'll be worth 6.12p per share. So that's another £266. If our investor had reinvested their June payout to buy more shares, they'd get a little more. So while the share price may lack spark, the income brings oomph. And reinvesting dividends when the stock is unloved should buy more shares, which could prove useful when the good times return. Assuming they do. A consensus of 11 analysts suggests the share price could hit 273.4p in the next year, a further 8% gain. Add the dividend and the total return edges close to 17%. That's not bad in a tough market. It's taken patience, but those numbers show how dividend investing can quietly work its magic over time. Results like this are why investors might consider buying. The post See what £10k invested in Legal & General shares in January is worth today appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Harvey Jones has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
13-07-2025
- Business
- Yahoo
Here's how to target £9,470 a year in passive income from £10k invested in this FTSE 100 star
Even after a recent price spike, my Legal & General (LSE:LGEN) shares are roughly at the same level as when I bought them in April 2024. Yet, thanks to the delivery of some spectacular dividends, the passive income I've received means I'm still sitting on a tasty profit. I bought in when the Legal & General share price was 250.9p. Today it's at 251.5p, giving me a capital gain of 0.6p per share. In that time it's also paid dividends totalling 35.99p per share, giving me a profit of 36.59p for each share and a total return of 14.6%. The FTSE 100 company has grown its annual dividends steadily since freezing them in the depths of the pandemic. Its long record of (mostly unbroken) payout increases dates back to the early 2010s, giving it a reputation as one of the UK's greatest dividend shares. City analysts are confident it will remain a lucrative dividend share for the foreseeable future, too. Over the next three years, Legal & General is tipped to raise the full-year dividend to 21.79p per share in 2025, and to 22.28p and 22.59p per share in 2026 and 2027. It paid a total reward of 21.36p last year. These prospective figures result in yields of 8.7%, 8.9%, and 9%. To put these figures into context, the Footsie's long-term average yield sits way back at 3%-4%. Based on this year's 8.7% yield, someone investing £10,000 in the business would make £870 in first-year dividends. If the yield remained the same for a decade, they'd receive payouts worth £8,700. Over 30 years that becomes £26,100. That's pretty good, I'm sure you'd agree. But, in my opinion, it does still look a little on the light side. That's because my projection doesn't include the benefit of compounding, where dividends are reinvested to buy more shares and therefore generate more dividends. Adopting this strategy, total dividends would be £12,960 over 10 years instead of that £8,700. Again, this assumes that this year's 8.7% yield continues. And over 30 years, passive income would total £98,100 instead of £26,100. With that initial £10,000 also factored in, the total value of our Legal & General shares would be £108,800. At this point, there'd be a healthy £9,470 annual passive income. However, there are a couple caveats to add here. My calculations above assume that dividends won't rise or fall over time, and that Legal & General's share price will similarly fail to move. In reality, both dividends and share price are certain to change. It seems likely to me that both dividend and share price will grow over the long term. However, the competitive nature of the financial services industry could dampen top-line sales and margins. Returns could also be hampered during economic downturns. I'm optimistic about the company's future because demand for retirement, protection and wealth services will likely increase, driving the company's share price and dividends skywards. The business is targeting core operating earnings per share growth of 6%-9% annually between 2024 and 2027 alone. I'm also encouraged by Legal & General's impressive cash generation, which supports its huge dividends. It's aiming for £5bn-£6bn of cumulative operational surplus over the period. In my opinion, anyone looking to make a large second income should give Legal & General serious consideration. The post Here's how to target £9,470 a year in passive income from £10k invested in this FTSE 100 star appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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. Motley Fool UK 2025 Sign in to access your portfolio
