Passive income investors like me are always hunting for shares that quietly churn out cash, whatever the market mood.
The real gems are the high-yield names with earnings that do not wobble when the economy does. These are the sorts of businesses that keep paying up even when sentiment turns sour.
Imperial Brands (LSE: IMB) has long looked to me like it perfectly fits this bill.
Key dividend drivers
Imperial’s business model is essentially a cash‑generation machine, and its 2025 results underline that strength once again. Price increases of 5.4% in its combustible portfolio more than compensated for falling volumes, keeping income flowing reliably.
The company’s five core markets — the US, Germany, UK, Spain and Australia — still deliver the bulk of adjusted operating profit. This anchors earnings in regions where performance is highly predictable, reinforcing the durability of future cash flows.
Additionally positive is Imperial’s tight cost control and ongoing simplification efforts. These helped drive adjusted operating profit up 4.6% to £3.99bn, nudging past the £3.98bn consensus. Those efficiencies also fuelled a 12% jump in free cash flow to £2.7bn, while adjusted earnings per share climbed 9.1% to 315p.
Meanwhile, next-generation products — mainly nicotine alternatives — delivered a 13.7% revenue rise over the year. This adds a steadily growing earnings layer for the years ahead.
A risk for Imperial is that the transition to these smoke-free products is delayed, allowing competitors to gain ground. Even so, analysts still forecast Imperial’s earnings will grow 4% a year to end-2028. And it is this that ultimately underpins any firm’s dividend payments over the long run.
Dividend outlook
Over the past five years beginning in 2021, Imperial has increased its dividend from 139.08p to 160.32p in 2025. This generated respective standout average annual dividend yields over those years of 8.9%, 7.6%, 8.8%, 7.1%, and 4.9%.
The current 5% dividend yield reflects the fact that these annual returns can go down as a share’s price rises, despite increases in yearly payouts. However, it still compares very favourably to the current FTSE 100 average dividend yield of just 3.1%.
That said, analysts forecast that the dividend will rise to 168.7p this year, 177.2p next year, and 186.9p in 2028. These would generate respective yields of 5.1%, 5.4%, and 5.7%.
How much passive income?
£20,000 — the same as I hold in the stock — would currently buy 607 shares in Imperial. Over 10 years on the forecast 5.7% yield, this would give £15,318 in dividends. This also assumes these payouts are reinvested into the stock to benefit from the turbocharging effect of ‘dividend compounding’.
On the same basis, the dividends would increase to £90,132 after 30 years. Adding in the original £20,000 investment, the holding would be worth £110,132 by then. And this would pay a yearly passive income from dividends of £6,278, assuming the dividend doesn’t go down at any point!
My investment view
I am optimistic Imperial’s dependable cash generation will keep its dividend growing steadily.
While the shift toward smoke-free products carries execution risk, the forecast earnings growth still supports a compelling long-term income case to me.
Consequently, I am happy to keep my holding in the firm and believe it well worth the consideration of other investors.
But these are not the only high-yielding passive income shares that have caught my eye in recent weeks.
