There’s a whole lot of competitors for my selection of favorite blue-chip dividend revenue inventory. Lloyds and wealth supervisor M&G each grace my Self-Invested Private Pension (SIPP).
However currently, one other holding has been placing on a present. Its title? Financial savings and retirement specialist Commonplace Life (LSE: SDLF), till not too long ago often known as Phoenix Group.
The final couple of years have been good for monetary shares. The massive FTSE 100 banks have flown, as have insurers. Greater rates of interest and buoyant inventory markets have pushed investor demand, as have all these juicy dividends.
So the Commonplace Life share worth is having a second, climbing 35% over the past 12 months. With a trailing dividend yield of virtually 6%, the full return is over 40%.
The best way to a super-yield
However let’s not get too carried away. Investing may be cyclical. Earlier than its current surge, the Commonplace Life share worth went nowhere for a decade.
Money era’s sturdy
Commonplace Life has an enormous development alternative within the rising retirement financial savings market because it’s producing loads of money and it has £317bn of property beneath administration. In 2025, working money era rose 5% to £1.47bn, whereas adjusted working revenue jumped 15% to £945m.
Like many insurers, it’s additionally seeking to develop within the thriving however aggressive pension threat switch market, with Commonplace Life teaming up with CVC, Prudential Monetary and others, to lift round £2bn to pursue bigger outlined profit pension offers.
What are the dangers?
After such a powerful run, Commonplace Life isn’t low-cost. Its price-to-earnings ratio is now 17.25. The P/E was in single figures once I purchased it in 2024. Inevitably, the yield has fallen too. I acquired in at round 10%.
Commonplace Life manages £317bn of property, so a inventory market stoop would hit payment revenue. The pension threat switch enlargement brings alternatives but in addition requires capital and carries execution dangers.
So is the dividend safe? Commonplace Life has an excellent report, rising its full-year payout for 10 years in a row, at a median charge of three.18% a 12 months. Nevertheless, future incrreases will gradual to a extra modest 2%. Which means that if inflation stays excessive, the worth of these dividends might shrink in actual phrases.
Additionally, the corporate appears financially sturdy. Its Solvency II shareholder capital protection ratio was 176% on the finish of 2025, comfortably inside its 140%-180% working vary.
Different sources of yield
If bond yields proceed to rise, income-seeking buyers might swap away from dividend-paying equites, as they’ll seize an honest risk-free yield elsewhere.
I feel Commonplace Life is correct up there among the many FTSE 100’s highest revenue shares. Authorized & Normal provides a better yield at 7.5%, however its shares have struggled for years.
The shares are price contemplating at this time, however settle for that after a powerful run, the expansion might gradual. I’m too uncovered to monetary shares to purchase extra of this one, however I’ve acquired my eye on equally thrilling FTSE revenue alternatives…
What revenue inventory will we like higher than Commonplace Life proper now?
One in every of our Share Advisor analysts has simply launched a model new inventory report that we predict is a must-read for any investor seeking to attempt to generate potential revenue.
And the very best bit is you could see if for your self, proper now, completely freed from cost!
No jargon. No onerous promote. Only a clear take a look at an revenue share we predict is price your time.
Harvey Jones owns shares in Authorized & Normal, Lloyds, M&G and Commonplace Life.
