FTSE 100 income stocks that offer dependable, long‑term dividends are not always easy to find. But this one stands out to me.
Its dividend profile looks reassuringly strong, supported by a business steadily building the earnings base needed for sustainable future payouts.
So, how much could investors seeking high, steady income realistically expect to make from its dividends alone?
Strong forecast earnings growth
Any company’s dividends and share price are ultimately powered by its earnings (or ‘profits’) growth. A risk for investment giant M&G (LSE: MNG) is a sustained period of extreme volatility in the global markets. This might prompt customers to withdraw funds from the firm, so squeezing fee income.
Even so, the consensus forecast of analysts is that its earnings will grow by an annual average of 28% to end-2028. This looks well supported to me by its recent results.
Its H1 2025 numbers saw assets under management rise to £354.6bn from £346.1bn. As its Asset Management business expanded, it still managed to trim its cost-to-income ratio to 75% from 77%. This helped to lift adjusted operating profit before tax (PBT) to £378m.
Its earlier 2024 results showed adjusted operating PBT increased 5% year on year to £837m, supported by a 19% increase from its Asset Management division.
Importantly for shareholders, the firm also announced a shift to a progressive dividend policy. This involves payouts rising at least in line with earnings per share but not being reduced if earnings decline.
Rising dividend yields forecast
M&G has raised its dividend every year from 2020’s 18.23p to 2024’s 20.1p. These generated respective average annual dividend yields of 9.2%, 9.2%, 10.4%, 8.9%, and 10.2%.
Its current yield is 6.5%, but analysts’ forecasts are that the payout will continue to rise as earnings growth continues.
Specifically, the projections are for dividend yields of 7.1% this year, 7.3% next year, and 7.8% in 2028. All of these are more than double the current FTSE 100 average dividend yield of just 3.1%.
How much dividend income could I make?
Dividend yields change over time, alongside movements in share price and annual payouts. However, based on the forecast 7.8% yield, my £20,000 holding in M&G could make me £23,519 in dividends after 10 years. This also assumes that the dividends are reinvested into the stock to harness the power of ‘dividend compounding’ and that there is no change to the dividend policy, which cannot be guaranteed.
On the same basis, the dividends would increase to £186,058 after 30 years. Including the original £20,000 investment, the holding would be worth £206,058 by then.
At that point, my M&G shares could be paying me an annual income from dividends of £16,073!
The buying power of this will have diminished a lot, assuming inflation over the period. But it would still be a great boost to any State Pension I will be receiving by then.
My investment view
I invested in M&G for three key reasons: its strong earnings momentum, rising dividends and solid capital discipline.
All these strengths still appear in place, as shown by the firm’s strong recent results and consensus analysts’ forecasts.
As such, I plan to buy more shares soon and believe other income-focused investors may find the stock equally appealing.
