Heading into November, I have been looking for some possible dividend shares to help boost my passive income streams. Not only have I been looking in the flagship FTSE 100 index of leading companies, I have also been hunting in the FTSE 250.
Here are three FTSE shares, each yielding over 7%, that I think investors should consider.
ITV: 7.2%
Broadcaster ITV (LSE: ITV) needs little introduction, as it has been a staple of national life for decades.
It still earns significant revenue from its legacy broadcasting operations. But in recent years it has also expanded its digital footprint significantly.
On top of that, by renting out studio space and providing production assistance, ITV is able to benefit even from its rivals making shows.
The company has committed to try and maintain the current dividend level, which at today’s share price makes for a yield of 7.2%.
I think the lack of a compelling growth story and worries about the impact of digital have weighed on the FTSE 250 share in recent years.
From an income perspective, though, I see that as presenting a potentially attractive opportunity given the dividend yield.
M&G: 7.7%
Even higher-yielding than ITV is FTSE 100 asset manager M&G (LSE: MNG).
The company not only aims to maintain its payout per share each year – like ITV – it actually targets growth. In recent years it has delivered on that, though this year’s interim dividend growth was modest.
M&G’s business model is pretty simple. Demand for asset management is high, both from institutional and retail clients. By operating in multiple markets, having a strong brand, and already working with millions of clients, M&G has a strong story for potential investors in its products.
Despite that, in recent years it has struggled to get investors to put more money in than they take out.
I see that as an ongoing risk to profits, but was pleased to see M&G made progress on that score when it reported a net inflow of funds for the first half of this year. It yields 7.7%.
Legal & General: 9.1%
What to make of Legal & General (LSE: LGEN)?
The FTSE 100 financial services provider has a well-known name, like M&G, as well as a large client base. Its focus on retirement-linked products means that it is addressing a large market that is willing to spend.
But earnings have been in decline. The Legal & General share price performance has been underwhelming too. Its growth of 28% over the past five years compares to 74% for the wider FTSE 100 during that period.
So, is its dividend yield of 9.1% an attraction or a red flag?
Like M&G, Legal & General aims to grow its dividend per share annually. No company’s dividends are ever guaranteed, but Legal & General last cut its payout during the 2008 financial crisis.
The sale of a large US business will eat into revenues, but it also provides a cash windfall the firm can use to help fund its dividend.
Meanwhile, I think the long-term prospects for its core business are good.
