8%+ yields! Are these jaw-dropping FTSE dividend shares a golden income opportunity?
The FTSE 100 contains some staggeringly generous dividend shares today. Three currently yield more than 8%, with one a whisker away from 9%. A few more pay more than 7%, while several others deliver income of over 6% a year. Any share price growth investors get will be on top of that.
Aha, sceptics will say, but a sky-high yield often signals trouble. Thatâs true. Vodafone‘s a classic example. At times the telecoms giant yielded more than 10%, but that didnât last. In 2019, payouts were slashed by 40%, and this year they were halved again. Today, the yield’s a more modest 4.3%, though at least the shares are finally rising.
Still, high yields can also be genuine opportunities. As ever, it all depends on the stock in question.
Financials doing the heavy lifting
I hold three of the FTSE 100âs top four yielders in my Self-Invested Personal Pension (SIPP): Legal & General Group, Phoenix Group Holdings and M&G (LSE: MNG). All yield more than 7.7%, with Legal & General offering a huge 8.8%.
I also own housebuilder Taylor Wimpey, which yields 8.6% and was in the FTSE 100 until recently. Today, it resides in the FTSE 250. These are incredible rates of income, miles above today’s FTSE 100 average yield of 3.15%.
Theyâre a bit too concentrated in financial services, but I love it when those big fat dividends hit my SIPP. Iâve studied the company accounts and the boards look determined to maintain payouts. There are no guarantees. Taylor Wimpey trimmed its dividend by 1.25% in 2024, while the rest plan modest increases of around 2% going forward.
Not every super yielder tempts. WPP has a headline 10.8% yield, but donât be fooled. The FTSE 100 media and advertising giantâs shares are in freefall, and the dividend will be cut by 50% in November.
M&G’s my favourite
Of the bunch, M&G’s my pick. Itâs given me share price growth as well as income. The stockâs up 27% in the last year and 50% over five years. With reinvested dividends, investors would have more than doubled their money.
Over the past five years, its dividend growth averages a modest 2.4% a year, but the high yield makes up for it. The groupâs Solvency II coverage ratio stood at 230% in the first half of 2025, even after funding the May payout. While operating capital generation dipped to £408m from £486m year-on-year, it grew on an underlying basis. The dividend looks solid, but no guarantees.
M&Gâs forward price-to-earnings ratio of 10.5 suggests itâs fairly priced, and analysts expect the yield to hold above 8% in 2026. There are risks. A stock market crash could hammer assets under management and fund inflows, while as an active manager M&G faces a constant threat from the popularity of low-cost, passive ETFs.
However, I’d still say it’s well worth income-focused investors considering today. Iâd say the same for Phoenix and Taylor Wimpey â I think the housebuilder is a brilliant potential recovery play, for when interest rates fall and the economy and housing market pick up. Legal & General’s underwhelming, but I’ll give it time.
Where else can I get this level of passive income? Thatâs the beauty of FTSE 100 dividend stocks, and why I think theyâre a golden opportunity today.
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Harvey Jones has positions in Legal & General Group Plc, M&g Plc, Phoenix Group Plc, and Taylor Wimpey Plc. The Motley Fool UK has recommended M&g Plc and Vodafone Group Public. 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.
