Aviva (LSE: AV.) shares have been a stalwart in UK income investor portfolios for many years now. This is due to the fact that they have often offered a very attractive dividend yield.
Wondering how much income you could generate with these shares? Let’s work out how much cash flow a £5,000 investment could potentially provide.
A chunky dividend
Aviva shares trade for 684p today. So ignoring trading commissions and Stamp Duty, £5,000 would buy 730 shares.
Now, this year’s dividend forecast is 38.6p per share. However, anyone buying the shares today wouldn’t be entitled to this full amount. That’s because Aviva pays dividends twice a year. And to receive the first one means owning the shares before 28 August (they went ‘ex-dividend’ on that date).
So let’s focus on the dividend forecast for 2026. This is currently 41.4p per share. Multiply 41.1p (that is, 0.414) by 730 and we get just over £300. That’s how much income could potentially be receive between October 2026 and May 2027 (when the second dividend for the year is usually paid).
It’s worth noting that we can use this calculation to work out how much income could be received with different investment amounts. For example, if we double the investment size to £10,000, we get roughly £600 in annual dividend income.
I should point out that the forecasts I’ve used may not be reliable. That’s the risk with dividends – they’re never guaranteed.
Looking past the yield
Now, there are plenty of UK stocks that offer higher yields than Aviva today. However, when investing for income, the focus shouldn’t solely be on yield.
One thing that’s always worth looking at is dividend growth. This can help an investor beat inflation (which remains persistently high in the UK). Next year, Aviva’s expected to raise its payout by about 7%. By contrast, Legal & General – which offers a higher yield today – is only expected to increase its payout by 2%.
Another metric to look at is dividend coverage. This is the ratio of earnings per share to dividends share and it can provide insights into the sustainability of a company’s dividend payout (the higher the ratio the better).
Looking at forecasts for next year, Aviva has a dividend coverage ratio of about 1.44 while Legal & General only has a ratio of 1.1. So Aviva’s payout looks a bit safer.
Of course, it’s also important to look at the performance of the underlying business. Buying a stock for the dividend without studying business performance is like buying a used car with a new set of tyres without looking at the engine.
The good news here is that Aviva is performing really well right now. For the first half of 2025, the company reported a 22% jump in operating profit, thanks to strong growth in insurance premiums and inflows in its wealth management business.
Obviously, there’s no guarantee that this strong performance will continue. Aviva operates in a highly competitive industry that can be volatile at times. However, right now, the company appears to have quite a bit of momentum.
Given this momentum, the stock’s probably worth considering for income.
