These are the highest yield income stocks on the whole FTSE 100

There are lots of FTSE income stocks with high yields at the moment. There’s more to it than that, but this might be a good start for some research.

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Investors seem to be mostly split into two camps. Some seek stocks with capital growth potential, while others prefer income stocks.

It’s the latter for me, and it’s why I care so much about FTSE 100 dividend yields. With a 5% yield, shares could pay for themsleves in 20 years in cash. Even more so if I buy more with my dividends each year.

And I’d still own the shares, with any growth thrown in. Can’t be bad.

Today’s big yields

After a year with so many scares and panics, a lot of share prices are down. And that means there are some very high yields from some Footsie shares. The following table shows the five biggest I can find, at the time of writing.

Different sources show different values and things can change quickly, so the picture might be a bit different by the time you read this.

StockRecent
price
YieldYield +1Yield +2
Vodafone68p11.7%9.8%10.0%
British American Tobacco2,338p10.0%10.2%10.8%
Phoenix Group Holdings530p9.9%10.2%10.5%
M&G220p9.1%9.3%9.6%
Imperial Brands1,810p8.1%8.6%8.8%
(Sources: Yahoo! Finance, MarketScreener. Yields are for the current year, ending 2023 or 2024, and the next two years.)

A nice portfolio?

The first thing that strikes me is that that might be close to a decent portfolio, with some reasonable diversification.

I don’t think I’d want two tobacco stocks though, so I’d swap out Imperial Brands for something else.

The next highest yields are banks and other financials. And with one insurer and an investment manager already in the list, I might skip over those.

That would take me to housebuilder Taylor Wimpey, with yields for this year and the next two years at 6.6%, 6.5% and 6.6%.

New ISA

In particular, if I was opening my first Stocks and Shares ISA in 2024, I really might be tempted to go for this lot.

Diversification is especially important starting out. There are few things that can put off a new investor worse than early losses, namely the thought of having to do lots of hard research to find a balanced portfolio.

And while I think of it, I reckon investment trusts can be a great way to start an ISA, as they provide diversification in a single buy.

My reality

As it is, with my stock market experience, I’d be a bit more picky. I’d narrow things down by looking at dividend cover, debt, and at how stock prices have gone.

The only one I’d really throw out based on that is Vodafone, which fails on all three. And I might just add a bank, as I don’t mind a bit of financial sector risk.

But even though I won’t actually buy all five of these right now, I’ll definitely keep my eye on them.

I’d like to revisit this next year, check how they did, and see what the biggest yields are then.

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 assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c., Imperial Brands Plc, M&g Plc, and Vodafone Group Public. 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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