2 FTSE 100 shares I’d buy now for income

Our writer thinks that buying this pair of 6%+ yielding FTSE 100 shares could help boost his passive income streams.

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Although the economy is starting to creak, some businesses continue to do very well. One way I can benefit from that as an investor is by buying shares in companies I think could keep making good profits and paying dividends. Here are two such FTSE 100 shares I would consider for my portfolio at the moment.

Insurer Legal & General (LSE: LGEN) is popular with many investors for its dividends. The track record is not perfect: the company cut its dividend during the financial crisis and held it flat for a year in the pandemic. But overall, the past couple of decades have seen the company increasing its payout in most years.

What matters as an investor, though, is not what has already happened but what is likely to follow. On this score too, I find Legal & General attractive as a possible income pick for my portfolio. It has set out a dividend strategy that anticipates growing dividends over the next several years.

Dividends are never guaranteed. Whether the insurer can deliver on its strategy will depend on how well the business performs. I think it has a number of strengths that could help it. The brand is well known, helping it attract and retain customers. With long experience in financial services, Legal & General understands the business well. Hopefully that can help it price services at a profitable level.

A weakening economy might lead people to shop around for insurance. Combined with rules introduced this year on premium renewal pricing, that threatens to take a chunk out of revenues and profits. But I continue to see Legal & General as a strong business with a potentially bright future. As an investor, its 7.4% dividend yield attracts me. I would consider adding these FTSE 100 shares to my portfolio.

British American Tobacco

Whatever happens to the economy, one industry I expect to benefit from resilient demand is tobacco.

That demand may decline over time, as fewer people smoke cigarettes than before. That could eat into revenues at British American Tobacco (LSE: BATS), the owner of brands including Lucky Strike. But I think this huge business can do well for a long time yet, even as cigarettes decline in popularity.

It can milk its cash cow of cigarettes. The company is also extending its portfolio in other areas. For now, the legacy business drives profits. But that may change in future, and the company’s portfolio of premium brands could help it grow its non-cigarette business.

Tobacco is a highly cash generative business. That has helped British American raise its dividend annually across two decades. Dividends are never guaranteed, but the current yield of 6.1% looks attractive to me. I own the shares and would consider buying more for my portfolio.

Both of these FTSE 100 shares offer me yields in excess of 6% and as inflation eats into the real value of money daily, high-yielding shares are increasingly attractive to me.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Christopher Ruane owns shares in British American Tobacco. The Motley Fool UK has recommended British American Tobacco. 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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