3 FTSE 100 shares that could make it rain dividends in 2025

Ben McPoland considers a trio of high-yield FTSE dividend stocks that are set to offer very attractive passive income this year.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Analysts expect £83.6bn in dividends from the FTSE 100 in 2025, according to AJ Bell, a 6.5% increase over last year. That translates into a forecast forward dividend yield of 3.9%.

Of course, this is an index-wide snapshot. Some individual stocks offer much more, including M&G (LSE: MNG) and Phoenix Group, which are both yielding over 10%!

Here, I’ll look at three FTSE 100 financial stocks that could make it rain dividends in my investing account.

Should you invest £1,000 in easyJet right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if easyJet made the list?

See the 6 stocks

10%+ yield

To start, I can’t ignore M&G. Shares of the wealth management and investment firm are currently offering an eye-popping 10.4% yield.

Created with Highcharts 11.4.3M&g Plc PriceZoom1M3M6MYTD1Y5Y10YALL8 Jan 20208 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025www.fool.co.uk

Better still, City analysts see the payout edging up another 3% this year, to 20.7p per share. Were this to come to fruition (bearing in mind that dividends aren’t assured), it places the forward yield at 10.8%.

In other words, investors could hope to receive nearly 21p back off every share they buy at today’s price of 190p. Just writing that makes me want to shut the laptop and reach for my phone to buy some shares!

Steady on though, there are risks to bear in mind. As an asset manager, M&G is exposed to the vagaries of financial markets, while competition is stiff. Also, the rise of passive investing continues to offer long-term challenges to the asset management industry, at least for active managers.

However, the bearish sentiment towards many FTSE 100 financial stocks looks overdone to me. M&G is due to publish last year’s earnings in March. If there isn’t anything to be alarmed about in the report, I may add some shares to my portfolio to target the otherworldly income.

8% yield

Next is Aviva (LSE: AV.). The company is already a UK insurance giant, yet is set to get even bigger after agreeing a deal to buy rival Direct Line for £3.7bn. If approved, this would significantly strengthen Aviva’s position in motor insurance.

Created with Highcharts 11.4.3Aviva Plc PriceZoom1M3M6MYTD1Y5Y10YALL8 Jan 20208 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025www.fool.co.uk

Mind you, it would also add risk, as sizeable acquisitions like this don’t always work out. The share price has gone nowhere since the announcement, suggesting investors are lukewarm.

Looking ahead however, Aviva is forecast to hike its dividend by 7% to 38p per share this year. That translates into an attractive 8% dividend yield.

Meanwhile, the stock looks cheap, trading at a price-to-earnings multiple of 9.8. I’m happy to keep holding my Aviva shares for now

6.6%

Finally, there’s HSBC (LSE: HSBA). The Asia-focused bank has enjoyed a strong rally, with its shares now trading at a multi-year high of 790p. Yet the forecast yield for 2025 is still 6.6%, well above the FTSE 100 average.

Created with Highcharts 11.4.3HSBC Holdings PriceZoom1M3M6MYTD1Y5Y10YALL8 Jan 20208 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025www.fool.co.uk

Meanwhile, the company has been buying back a load of its shares. In October, it announced a new $3bn buyback, following on from the last one worth $3bn. Indeed, by the end of September, it had already forked out $18.4bn on dividends and buybacks for the year. So the bank is in a good place right now.

That said, HSBC makes the bulk of its profits in Asia. Were these markets, particularly China, to suffer during a new trade war under Donald Trump, that could cause volatility in earnings.

Yet, with the shares still trading cheaply and offering a 6.6% yield, I like the risk/reward setup here.

Should you buy easyJet shares today?

Before you decide, please take a moment to review this first.

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Claim your free copy now

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.

Ben McPoland has positions in Aviva Plc and HSBC Holdings. The Motley Fool UK has recommended Aj Bell Plc, HSBC Holdings, and M&g Plc. 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.

More on Investing Articles

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

Up 5% in the last crazy week! Are these 2 income stocks the ultimate FTSE defensive plays?

Harvey Jones picks out two FTSE 100 dividend income stocks that have actually climbed while stock markets are heading in…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

2 beaten-down UK shares that now look really cheap

Looking for cheap shares to consider for the long term? These two British stocks offer a lot of value right…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

As stocks tank, is this a rare chance for ISA investors to get rich?

Shares have collapsed globally and valuations are becoming, on paper at least, a lot more attractive. Dr James Fox explores…

Read more »

Investing Articles

2 strong FTSE 100 dividend shares to consider as recessionary risks increase

Looking for secure passive income stocks to consider buying as thumping trade tariffs loom? Here are two FTSE 100 dividend…

Read more »

Investing Articles

Can Greggs shares offer shelter from Trump’s tariff chaos?

Greggs' shares have plummeted in recent months. But with very little exposure to the US or tariffs, could the stock…

Read more »

Investing Articles

Income of almost 12%! 3 stunning FTSE dividend stocks now have double-digit yields

Harvey Jones is amazed by the sky-high income on offer from these FTSE 100 dividend stocks, but he's also aware…

Read more »

Investing Articles

As vehicle sales slump, should I buy Tesla stock on the dip?

Andrew Mackie assesses whether Elon Musk’s political leanings are destroying the Tesla brand or is now the time to be…

Read more »

Dividend Shares

Why this stock market correction is great for passive income investors

Jon Smith explains why those looking for passive income from dividends could benefit from the move lower in stock prices…

Read more »