Legal & General (LSE: LGEN) has been a FTSE 100 favourite with ISA investors for some time. No doubt, that’s been driven in part by the fat 8% dividend yield projected by analyst forecasts. In fact, it’s the biggest forward yield in the whole Footsie right now, where the top rankings are dominated by the insurance sector.
A company can never guarantee a dividend, so will it live up to hopes? We have to wait for 11 March, when Legal & General is scheduled to deliver full-year results.
“An excellent six months”
At first-half time, CEO António Simões told us: “Institutional Retirement operating profit is up double digits, and we have written over £5bn of new business at low capital strain.” He added: “In Retail, our customer base has grown to 12.4m, and workplace pension assets have surpassed £100bn.”
The company lifted its interim dividend by 2%. And the boss spoke of “our promise to return more to shareholders with over £5bn in dividends and share buybacks over three years“.
My feeling is that the dividend is in the bag. But I’m also wary that earnings aren’t expected to cover it this year. And we’d only see very modest cover on 2026 and 2027 forecasts too. So, in the short to medium term, I do see a dividend risk. If it dips, I expect the share price to take a tumble.
But I rank Legal & General among my top 10 shares to consider for the long term. It’s only my holding in Aviva (with results due on 5 March) keeping me back from buying. Phoenix Group Holdings and Prudential also report in March, on 16 and 18 March, respectively.
Back to bricks
The insurance sector might be my all-time FTSE 100 favourite, but house builders aren’t far behind. And we have a couple of full-year results coming, starting with Taylor Wimpey (LSE: TW.) on 5 March.
It’s a curious sector. Or to be more accurate, the approach of investors raises my eyebrows. If there’s one industry that really needs a very long-term focus, this has to be a candidate.
But the Taylor Wimpey share price can be as volatile as they come in the short term. I reckon as long as the company can get through downturns well enough — which it has a strong track record of doing — it should keep on rewarding shareholders who stick with it. And an individual annual report is unlikely to mean much.
But the markets will be watching, so what should we expect? CEO Jennie Daly in January spoke of “a robust performance during 2025 in the context of challenging market conditions“. Completions rose, and the average selling price edged up a bit. That’s not bad in a tough year.
The dividend suffered a small cut in 2024. And if we see the same again this year — as analysts expect — more share price weakness could follow. And construction cost inflation is having an impact. But I rate this as another worth long-term consideration.
In the same sector, Persimmon reports on 10 March.
