Is this a once-in-a-decade opportunity to target a second income?

Stock market volatility is boosting investors’ chances of building a huge second income. As share prices sink, dividend yields are heading in the other direction. So for every pound invested, individuals can get more back in dividends.

Is this a once-in-a-decade chance for income investors? In a word, no. As economic and political conditions become less certain, stock market corrections and crashes are becoming more frequent.

But this doesn’t mean investors shouldn’t strike when volatility comes along. Let me explain, as well as reveal one of the FTSE 100‘s hottest dividend shares right now: M&G (LSE:MNG).

High-yield FTSE hero

At 274.8p, M&G’s share price has slumped 8% in value. This makes it the fifth-worst-performing share on the FTSE.

Has the market overreacted by sending its shares sharply lower? Perhaps not — after all, as a savings and investment products provider, it stands to lose if inflation soars and interest rates are hiked. This is a very real possibility if the Middle East conflict continues, threatening consumer spending on discretionary financial services.

But is this likely to damage the dividends paid on M&G shares? I’m highly doubtful. After all, the company continued to raise dividends even during the height of the Covid-19 pandemic. And as a keen income investor, this is incredibly attractive to me. Annual payouts have indeed risen every year since M&G joined the London Stock Exchange in 2019.

M&G has its robust cash generation and deep capital reserves to thank for this. And today its balance sheet is as cash-rich as it’s ever been. As of December, its Solvency II ratio was a sector-leading 242%.

This is almost two-and-a-half times the regulatory minimum. It’s also up from 223% just 12 months earlier.

A 7.7% dividend yield

Just as a rising tide lifts all boats, recent stock market volatility has pushed dividend yields higher across the FTSE 100. What strikes me about M&G shares, though, is the size of the dividend yield now that its share price has fallen.

At 7.7%, it’s yield is the third-highest on the Footsie for 2026. Only Legal & General and Standard Life shares beat it on this front, but as I say, M&G has stronger financial foundations, making it potentially a more secure dividend pick.

M&G is a high-quality business with excellent growth potential as financial services demand rises. It has also proved itself adept in less-favourable market conditions — it registered £7.8bn of net inflows last year as both its Asset Management and Life divisions outperformed. That was a £10bn year-on-year improvement.

I don’t think the firm’s resilience or its long-term growth prospects are reflected in its rock-bottom price-to-earnings (P/E) ratio. This is just 9.9 times on a forward basis, and — combined with that dividend yield — makes M&G shares an excellent value stock to consider. Buying quality shares like this when they fall could seriously boost one’s second income.

The post Is this a once-in-a-decade opportunity to target a second income? appeared first on The Motley Fool UK.

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Royston Wild has positions in Legal & General Group Plc. The Motley Fool UK has recommended 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.

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