Is Legal & General one of the best dividend shares to consider today?

Legal & General (LSE:LGEN) has long been one of my favourite global dividend shares. It’s actually currently the largest single holding across my portfolio. I bought it as a way to source large dividends that grow over time.

Rising dividends on Legal & General shares — *Source: Dividendmax*

As you can see, dividends here have been rising consistently for well over a decade (excluding pandemic-hit 2020). What’s more, the dividend yield here has long surpassed the 3%-4% long-term average for UK blue-chip shares.

Dividend yields on Legal & General shares — *Source: dividenddata*

Even today, the dividend yield is more than double the current FTSE 100 average, at 8.7%. This is despite a near-9% rise in the share price so far in 2025.

I actually think it could be the Footsie’s greatest passive income stock.

Cash machine

The beauty of the business from an income perspective is that it’s swimming in cash. As of December, its Solvency II capital ratio was 232%, more than double what regulators require.

Legal & General has a broad range of revenue streams that provide a constant stream of cash. From life insurance, to pensions and asset management, and operations spanning four continents, it still enjoys robust cash flows even when certain products or regions underperform.

Reflecting this fact, the company is committed to raising annual dividends by 2% between 2025 and 2027. It is also planning substantial share buybacks. It’s targeted £500m of repurchases this year alone, and around 40% of its market cap (currently £14.4bn) in the next three years.

Growth opportunity

There may be bumps along the way, but I’m confident that Legal & General will remain a long-term winner. Some of the dangers it faces are economic downturns and higher interest rates that impact sales, and intense competition from other industry heavyweights like Aviva, Aegon, and Invesco.

However, the pace at which demographic changes are driving industry growth are significant. Protection and retirement products and asset management services are set for sustained growth, underpinned by growing awareness of the need for future planning, as uncertainty grows over the level of state support when we become older.

Last month (17 June), the business announced plans to boost annual operating profit growth at its asset management arm by a juicy 6%-10% between 2024 and 2028. I’m not surprised that it’s so bullish: analysts at Mordor Intelligence expect the global asset management industry to grow at an annualised rate of 13.4% from this year to 2030.

Value star

With its exceptional brand power and huge global operations, I think the FTSE 100 firm’s in one of the best seats to capitalise on this enormous opportunity. Yet I also don’t believe this is currently baked into its rock-bottom valuation.

At 250p, Legal & General shares trade on a forward price-to-earnings (P/E) ratio of 10.9 times. With it also packing that enormous dividend yield, I think it’s an excellent bargain stock to consider.

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But here’s another bargain investment that looks absurdly dirt-cheap:

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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Royston Wild has positions in Aviva Plc and Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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.