Putting my money to work in FTSE 100 companies can be a great way of bringing in extra cash without lifting a finger! So I’ve picked out three shares that I think will keep providing regular earnings over the long term, based on their dividend history, current share price and past financial performance.
Legal & General
At present, I can buy shares in financial services giant Legal & General (LSE: LGEN) for 285.9p, 6.3% less than it would have cost me in January 2022.
But the real stand-out statistic is its dividend yield, which is currently sitting at 8.4%, twice the FTSE 100 average!
Having consistently recorded profits of close to £2bn for the past five years, and increased net profit margin to an impressive 21% in 2021, the actual dividend per share paid out has grown and grown over that period. In 2021 the total dividend per share was 18.45p, and the 2022 payout is looking like it will be higher still, with the interim dividend exceeding the prior year by 5%.
With a great dividend payout history, I think this stock looks like a great passive income vehicle.
Shares in Imperial Brands (LSE: IMB) cost 19.5% more than it did this time last year, now 1,907p, but it is still carrying a sizeable 8.4% dividend yield.
Recent annual revenue has been very stable, sitting around the £16bn mark, but profits for 2021 grew to £2.8bn, giving a net profit margin of 17% – almost double that of the previous year’s margin.
Historically, the tobacco seller has paid out four dividends per year, and the 2022 payouts that have been announced are both in excess of prior-year equivalents.
Imperial’s main market is cigarette sales, and the addictive nature of this product will mean it exists as a relatively inelastic good to many consumers. With cigarette sales on the whole slowing, it does mean businesses like Imperial may be able to increase prices to offset the decline in sales of individual units.
A profitable business with dividend payments like clockwork, I still think this stock will deliver regular long-term dividends to shareholders.
Lloyds Bank (LSE: LLOY) is currently trading at 45.74p, which is 10.8% less than the price it was trading at six months ago.
The FTSE 100 mainstay has recorded profits in each of the past five years, and after a slight lull in Covid-hit 2020, its net profit for the financial year 2021 hit a staggering £5.8bn!
That has translated into rewards for shareholders. In recent years, Lloyds has usually paid two dividends per year and, true to form, both an interim and final dividend have been announced for 2022. The company’s dividend yield is sitting at 4.7%, above the FTSE 100 average of 4%.
Having recently lifted full-year guidance due to strong performance this year, I think Lloyds looks a solid investment to bring me bi-annual returns for years to come.
Reasons to be cautious?
Of course, investing in the stock market is never without risk. With a possible recession on the horizon, it wouldn’t surprise me if these companies all reined in their dividend generosity a little while they ride out the storm.
The post 3 top FTSE 100 dividend shares for long-term passive income appeared first on The Motley Fool UK.
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James Yianni has no position in any of the shares mentioned. The Motley Fool UK has recommended Imperial Brands and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.