3 top dividend shares that investors should consider in 2025
If you’re a yield-hungry investor like me, now could be a smart time to take a look at some unloved dividend shares. I’ve picked out three FTSE 100 names that are offering yields north of 3.5%, but have largely gone ignored in 2025 despite operating in generally defensive sectors.
Legal & General
I think Legal & General (LSE: LGEN) is worth considering. It has had a decent if unspectacular start to 2025, with its share price gaining 9.4% to sit at 256p as I write late on 16 June. Despite these gains, it remains one of the FTSE 100’s top dividend shares with an 8.4% annual dividend yield.
The company has a market cap of over £14bn and is trading 4% below its 52-week high of 266p. The strong recent gains come after management reported a 6% increase in core operating profit to £1.62bn for the year ended March 2025, and boosted its dividend per share by 5% to 21.36p.
Key risks for mine are the company’s earnings volatility and fierce competition in the asset management space. However, I think its core life insurance and retirement arms could offer long-term revenue streams to underpin its future dividends.
M&G Group
Asset manager M&G (LSE: MNG) is another high-yield dividend share that I believe investors should consider right now. The shares have rocketed nearly 30% higher year-to-date, but the dividend yield is hovering around a juicy 7.8%.
Like Legal & General, M&G shares are sitting just below a 52-week high at 259p. However, operating profit rose 5% in 2024, and management has reiterated its intention to maintain or grow the dividend.
Throw in a recent deal for Dai-ichi Life to acquire a 15% stake in the company and channel $6bn (£4.4bn) in new business to it over five years, and this has helped its valuation skyrocket in recent months.
That’s not to say it’s all rosy for investors in M&G. Persistent fund outflows and market volatility could strain future cash flow, but the high dividend yield does make it one to watch.
British American Tobacco
British American Tobacco (LSE: BATS) has long been a top Footsie dividend share. The company has managed to deliver steady income to shareholders over many years and through the ups and downs of the economic cycle.
The company has a 6.6% dividend yield, but its shares do trade at a price-to-earnings (P/E) ratio of 26.3. That’s above the Footsie average, which makes sense to me as steady dividend payers in defensive industries don’t come cheap.
The company’s dividend has been growing modestly, backed by strong cash flow generation from its core cigarette and next-gen products.
I see regulatory risk and changing consumer behaviours as the key risks here. Increasing restrictions around the use of vaping products, including in the UK, could limit growth. However, I think it’s a tasty dividend yield in a long-time Footsie company that makes it one to investigate further.
Key takeaway
If you’re focused on generating income, these unloved dividend shares may deserve a spot on your radar. They’re not without risk, but for long-term income hunters, the rewards might be worth the wait.
The post 3 top dividend shares that investors should consider in 2025 appeared first on The Motley Fool UK.
But this isn’t the only opportunity that’s caught my attention this week. Here are:
5 Shares for the Future of Energy
Investors who don’t own energy shares need to see this now.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.
While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions,
he says. Mark believes 5 companies in particular are poised for spectacular profits.
Open this new report — 5 Shares for the Future of Energy
— and discover:
- Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
- How to potentially get paid by the weather
- Electric Vehicles’ secret
backdoor
opportunity - One dead simple stock for the new nuclear boom
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
More reading
- Up 50% and 30% in a year! These 2 FTSE 100 dividend shares are behaving like growth stocks
- At today’s price, buying 1,000 British American Tobacco shares generates a second income of…
- Why buy UK shares when I can get 4.5% a year in cash?
- How many Legal & General shares must an investor buy to earn £1k of monthly passive income?
- £250k in savings? Here’s how to instantly unlock a £20,750 second income
The Motley Fool UK has recommended British American Tobacco P.l.c. and M&g Plc. 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.
