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Analysts expect £83.6bn in dividends for FTSE 100 in 2025, according to AJ Bellincreased by 6.5% compared to last year. It paid a dividend of 3.9%.
Yes, this is a comprehensive summary of the index. Some individual stocks offer more, including IM&G (LSE: MNG) and Phoenix Groupboth yield more than 10%!
Here, I will take a look at three FTSE 100 financial stocks that could make rain dividends in my investment account.
10%+ yield
For starters, I can’t ignore M&G. Shares of the wealth management and investment company currently offer a healthy yield of 10.4%.
Even better, City analysts see the payout rising another 3% this year, to 20.7p per share. If this were to materialize (keeping in mind that dividends are not guaranteed), it puts the forward yield at 10.8%.
In other words, investors can hope to get around a 21p discount on every share they buy at today’s price of 190p. Just writing that makes me want to close the laptop and reach for my phone to buy some stocks!
However, there are risks to be aware of. As an asset manager, M&G is exposed to volatile financial market conditions, while competition is tough. Also, the rise of passive investing continues to present long-term challenges to the asset management industry, at least for active managers.
However, the bearish sentiment for FTSE 100 financial stocks seems overdone to me. IM&G will publish last year’s earnings in March. If there is nothing to scare you in the report, I can add some stocks to my portfolio to target foreign income.
8% yield
Next is Aviva (LSE: AV.). The company is already the UK’s biggest insurance giant, but is set to grow even further after agreeing a deal to buy a rival. Straight Line for £3.7bn. If approved, this will significantly strengthen Aviva’s position in motor insurance.
Be careful, and it will add risk, as big acquisitions like this don’t always work. The share price has not moved anywhere since the announcement, suggesting that investors are still lukewarm.
However, looking ahead, Aviva is expected to raise its dividend by 7% to 38p per share this year. That means an attractive dividend yield of 8%.
Meanwhile, the stock looks cheap, trading at a price-to-earnings multiple of 9.8. I am happy to continue holding my Aviva shares for now
6.6%
Finally, there is HSBC (LSE: HSBA). The Asia-focused bank enjoyed a strong rally, with its shares now trading at a multi-year high of 790p. However the 2025 forecast yield is still 6.6%, above the FTSE 100 average.
Meanwhile, the company has been buying back a lot of its own shares. In October, it announced a new $3bn purchase, following the last one worth $3bn. Indeed, by the end of September, it had paid out $18.4bn in dividends and buybacks over the year. So the bank is in a good place right now.
That said, HSBC makes most of its profits in Asia. Would these markets, especially China, suffer during a new trade war under Donald Trump, which would cause income volatility.
However, since the shares are still trading cheap and offer a yield of 6.6%, I like to set the risk/reward here.
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