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A Shares and Shares ISA seems to be like the proper residence for a portfolio of dividend-paying FTSE 100 shares. There are some sky-high yields for the time being, and I really maintain 4 of the highest 5 largest FTSE 100 revenue payers.
Topping the record is wealth supervisor M&G, with a colossal yield of 9.12%. Earlier this month it despatched me a £450 money cost, which I routinely reinvested to purchase but extra shares.
Subsequent up is insurer and asset supervisor Authorized & Common Group, yielding 8.83%, intently adopted by one other insurer, Phoenix Group Holdings, which yields 8.46%.
Passive revenue stream
All three are in monetary providers, and whereas the sector’s had a tough journey , the companies are nonetheless throwing off money. Nonetheless, the Authorized & Common share course of has fallen 4.2% within the final yr, consuming into that revenue.
| Inventory | Trailing dividend yield | 1-year share worth progress |
| M&G | 9.12% | 7.56% |
| Authorized & Common | 8.83% | -4.20% |
| Phoenix Group | 8.46% | 25.32% |
| Taylor Wimpey | 7.87% | -18.57% |
| British American Tobacco | 7.12% | 33.97% |
There’s definitely some crossover right here, and it’s most likely a bit daft to personal all three financials. However I couldn’t resist these yields.
I additionally maintain housebuilder Taylor Wimpey, which presently yields 7.87%. The share worth has been sketchy of late, as excessive inflation and rates of interest hit purchaser demand and drove up prices. On the plus facet, my reinvested dividends decide up extra inventory consequently.
British American’s shares are on hearth
The fifth largest yielder is British American Tobacco (LSE: BATS), which is the one one I don’t personal. That’s a private selection relatively than an funding one. It’s been a cracking performer.
British American Tobacco’s share worth has jumped 33% over the previous yr and it nonetheless yields a beneficiant 7.12%.
2024 outcomes had been stable, even when reported revenues dipped 5.2%, because of the exit from Russia and Belarus, and foreign money stress.
Natural income rose 1.3%, with its newer, smokeless merchandise now making up 17.5% of group gross sales. It added 3.6m grownup customers on this class, taking the entire to 29.1m.
The group managed to promote a staggering 505bn cigarette sticks and 13bn different tobacco merchandise final yr. So it’s not out of puff simply but.
It’s pushing ahead with a strategic shift to a ‘Smokeless World’ by 2035. Whether or not regulators will let it get there’s anybody’s guess. New well being dangers could emerge.
After the sturdy latest share worth run, I’d count on it to sluggish. Nonetheless, in the present day’s price-to-earnings ratio of 9.1 isn’t precisely demanding.
For now, its dividend seems to be effectively supported, with money stream of £7.9bn and a 2% dividend hike to 240.24p.
Excessive revenue, low progress
If I break up a £20,000 Shares and Shares ISA equally between these 5 massive yielders, I’d lock in a median revenue of 8.3%. That might generate £1,660 in my first yr alone. It’s a cracking return at a time when financial savings accounts are beginning to look much less beneficiant.
Over time, that revenue would possibly develop too, however solely slowly. Many of those companies are mountaineering their dividends by round 2%, which is presently lagging inflation.
When yields are this excessive, a little bit of sluggish dividend progress is forgivable. Dividend revenue is rarely assured, however I believe all 5 are value contemplating, though buyers ought to goal some progress as effectively.
