Legal & General tops the FTSE 100 dividend yield table
The insurer pays the biggest yield in the London index, but analysts cited by Yahoo Finance prefer three other dividend shares.
The biggest payout in the index
Legal & General, the London-listed insurer and asset manager, currently offers the highest dividend yield in the FTSE 100, the index of large companies listed on the London Stock Exchange. Yahoo Finance puts the yield at about 7.7%. The Twelfth Magpie, formerly The Motley Fool UK, gives a trailing figure of 7.5%, and neither publication explains the gap.
Yahoo Finance reports that City analysts are bearish on the stock, with many firms rating it Sell because they expect the share price to fall. The concern is rising competition in the Pension Risk Transfer market, where Legal & General has written a large volume of business over the past decade.
That competition could mean slower growth or thinner profit margins, according to the same report, which raises the possibility that the company would have to rein in its payments. Yahoo Finance notes that a 15% fall in the share price would wipe out close to two years of dividends.
Three shares analysts prefer
The first alternative named by Yahoo Finance is Aviva, a rival insurer, which has eight Buy or Strong Buy ratings. Its yield is lower at about 5.7%, but analysts expect the payout to grow.
The second is Imperial Brands, a tobacco company, with nine Buy or Strong Buy ratings and a yield of about 6.6%. The consensus analyst view is that the stock is worth roughly 35% more than the current price.
The third is LondonMetric Property, a real estate investment trust focused on logistics, convenience, entertainment and leisure, and healthcare. It also holds eight Buy or Strong Buy ratings, yields about 6.7%, and is seen as having scope for share price gains of around 17% in the medium term. The Yahoo Finance writer names Aviva as a personal top pick, citing the transformation strategy of chief executive Amanda Blanc.
Share price and profits
The Twelfth Magpie reports that Legal & General shares are up 19.5% over the last 12 months, and that dividends lift the total return towards 27%. That still trails two other FTSE 100 financial firms, M&G and Standard Life, up 33% and 38% respectively over the same period.
The company's profits have been uneven, the article says, because pensions, annuities and asset management are affected by markets, interest rates and investment values. It reports that 2025 operating profit before tax rose 5% to £2.65bn and operating cash generation rose 8% to £1.8bn. The author, who holds the stock, cautions that the revival could prove a false dawn.
Seeking Alpha has downgraded Legal & General to Hold, saying risk-adjusted returns now look fair. Its previous position was increased after a share price fall linked to a slight miss in core operating profit. The sources do not give the current share price or the dividend per share.
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