Today’s disposal of Legal & General’s (LSE: LGEN) self-invested personal pension (SIPP) provider Suffolk Life to Curtis Banks for £45m is good news for the company’s investors. That’s because it’s in line with L&G’s strategy of focusing on its core operations, through which it believes it will be able to achieve significant scale and more attractive returns on capital.

Looking ahead, L&G is forecast to post an increase in its bottom line of 7% in the current year and with its shares trading on a price-to-earnings (P/E) ratio of 11.9, it appears to be a strong buy at the present time. That’s not only because of the scope for an upward rerating however, since L&G also has a yield of 5.9% as well as upbeat income prospects.

For example, L&G is expected to grow its shareholder payout by 6.7% in the current year. And with it having a payout ratio of 70%, there appears to be scope to raise dividends by at least as much as profit increases in future years. Therefore, while the company’s shares have tumbled by 9% already in 2016, they appear to be a sound long-term buy for income-seeking investors.

Dividend cut?

One stock that trumps L&G’s yield is diversified energy company BHP Billiton (LSE: BLT). It currently yields a whopping 12.5% and this indicates that the market is convinced there will be a dividend cut in the near term. This would be a sound move for the company since its current level of payout appears to be highly unaffordable over the medium-to-long term, since it equates to more than double the level of net profit due to be recorded this year.

While a dividend cut would be bad news in the short run, it would help to shore-up BHP’s long-term outlook and could release capital to be spent on acquisitions so it can take advantage of the discounted prices that are present in the energy space. And with BHP enacting a major restructuring that has seen non-core assets spun-off, its long-term future could be brighter as it seeks to increase its market share and also become a more efficient business.

So, while BHP may not be a strong buy for income-seeking investors due to the potential for a major dividend cut, it still offers the potential for a high total return in the long run.

Dollar woes

Meanwhile, Experian (LSE: EXPN) today updated the market on its progress, with the credit-check company suffering from an appreciating dollar that affected revenues at its Latin American business in particular. However, on a constant-currency basis, Experian increased its top line by 6% in the third quarter of the year and has maintained its previous guidance for the full year.

With Experian yielding just 2.5% at the present time, there appear to be better options elsewhere when it comes to income stocks. Certainly, Experian has the potential to rapidly increase its dividend, with the company having a dividend coverage ratio of 2.2 and being expected to increase earnings by 7% this year. However, with the FTSE 100 yielding over 4%, Experian lacks appeal as a dividend stock over the medium term.

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Peter Stephens owns shares of BHP Billiton and Legal & General Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.