3 top dividend stocks to consider for passive income now
As someone who values passive income, I understand that I should look at shares of companies that pay dividends. While bearing in mind dividends arenât guaranteed, here are three for investors to consider if theyâre likeminded.
Legal & General
Looking purely from a yield perspective, Legal & General (LSE:LGEN) shares are among the best in the FTSE 100. Their dividend yield is currently a very attractive 8.8%.
Now, there are risks to holding the companyâs shares. As itâs in the financial services industry, it performs quite cyclically and can underperform during times of economic uncertainty. With UK gilts rising, there’s concern about the state of the countryâs finances.
Legal & General has seen its shares falling by 7.4% over the last month, suggesting there’s pessimism resulting from this.
However, income investors shouldnât be so concerned about this. Thatâs because they understand that to obtain the dividend income from the financial services firm, they can pay 7.4% less than they had to this time last month.
This is especially the case if they have a strong outlook for the UK economy over the long term.
Rolls-Royce
You might be wondering why I have included Rolls-Royce (LSE:RR) shares here. Its dividend yield of 0.9% certainly pales in comparison to the Footsie average of 3.2%.
However, this is because the hallmark of a good dividend-paying stock isnât just its yield but also its fundamentals. I think the aircraft engine manufacturer has one of the best business fundamentals in the UK. Plus, investors get a dividend on top as a bonus.
One of my favourite parts of its business model is its investments in small modular reactors (SMRs). It has recently signed deals with the Czech and UK governments to supply them with SMRs. Itâs also one of the two SMR companies shortlisted by Sweden to use for its nuclear programme.
CEO, Tufan Erginbilgic, estimates the world will need 400 SMRs by 2050. At a cost of up to £2.2bn each, this could be a huge market for the firm.
There is a big risk, however. SMRs are a largely unproven technology. If they prove to be an unsuccessful source of energy, it could very much hurt Rolls-Royce shares.
AbbVie
The final company I want to discuss is the US pharmaceuticals giant, AbbVie (NYSE:ABBV). With a dividend yield of 3.1%, thereâs certainly an opportunity to make a second income with its shares.
There was a concern that the company would struggle when it lost exclusivity for its top-selling drug Humira in 2023.
However, this hasn’t happened. In the first half of 2025, Humira sales fell by 54.7% to $2.3bn. But the companyâs new top-selling drugs, Skyrizi and Rinvoq, more than made up for this, rising by 65.8% and 48.5%, respectively. Because of this, the firm saw its overall revenue rise by 7.4%.
There are also other growth opportunities, such as the cancer drug Elahere, which saw its sales rise by 75.5% to $338m.
With Trumpâs tariffs though, the company could see its margins hit, especially as its drugs arenât made exclusively in the US, and they need to source some ingredients abroad.
However, with a track record of raising dividends for 53 consecutive years, itâs still a great passive income option to consider.
The post 3 top dividend stocks to consider for passive income now appeared first on The Motley Fool UK.
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Muhammad Cheema has positions in AbbVie. The Motley Fool UK has recommended Rolls-Royce 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.
