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These FTSE 100 shares have dividend yields of over 6%

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Dividends are great, aren’t they? They provide a passive income and reward for holding a stock. The good news for UK investors is that the FTSE 100 is fertile hunting ground for shares with high dividend yields. These two FTSE 100 shares are among my favourites — both have yields over 6%.

A top performer

The insurer and asset manager Legal & General (LSE: LGEN) is a company I’ve admired for a long time. Historically, it has performed better than its rival Aviva and, unlike Aviva, it maintained a dividend payment to investors throughout the pandemic.

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Legal & General shares have a dividend yield of just a smidgen over 6%. That is very attractive to me as an income investor. More than that though the shares strike me as being cheap, probably even undervalued. The price-to-earnings multiple on a one-year rolling basis is 8.5. That is far lower than many companies with strong future growth prospects, as I think Legal & General does.

The future growth comes from an ageing population, increased need for pensions, and its investing expertise. Legal & General has great scale, relationships, and brand awareness, which combine to make it a formidable player in the asset management industry.

The thing most likely to hit the share price is if economic concerns flare-up. Legal & General’s share price has historically been very tied to the health of the economy. Therefore, if the economy falls, LGEN’s share price would likely fall too.

Digging for gold

As I’ve pointed out before, miners are among the top dividend payers at the moment. Polymetal International (LSE: POLY) is another share from that sector that I like, especially from a high dividend yield perspective. It’s a top-10 global gold producer and top-five global silver producer, with assets in Russia and Kazakhstan.

Between 2015 and 2020, revenue at the miner has gone from $1,441m to $2,865m. Net profit over the same timeframe rose from $221m to $1,472m. That is just incredible growth, in my opinion. When combined with a P/E of eight, a price-to-earnings growth (PEG) ratio of 0.8, and a dividend yield knocking on the door of 7%, it looks like the kind of share I’d want to add to my portfolio. Gold could see increased demand if inflation persists and, in that situation, there could be even better times ahead for Polymetal.

With all miners, though, there are major risks. The price of the commodities mined – in this case gold and silver – could fall. That feeds through into Polymetal’s results. Mining is a very cyclical industry. Then, there’s the fact that because it’s based in Russia and Kazakhstan. Many investors may never be willing to pay a high price for the shares because of the perceived risks of doing business in those countries.

However, the fact the Polymetal share price is well off its year high just makes the shares look all the more tempting to buy to me. If I didn’t already hold two miners in my portfolio, I’d be buying Polymetal shares for the long-term share price growth potential and for the dividend income.

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Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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Andy Ross owns shares in Legal & General. 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.

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