After a 32% drop this amazing FTSE income stock is yielding 10.2% and I can’t get enough of it

2025 is shaping up to be the year of income stocks. I FTSE 100 it’s full of high-yielding stocks, and I’m banking on generating a lot of passive income for my portfolio.

Last year was disappointing for the UK blue-chip index. After a good start, stocks lost most of their early gains as growth and confidence waned.

That’s frustrating in the short term but a huge opportunity in the long run. And let’s face it, that’s the only time investors should consider it.

Will Phoenix shares soar in 2025?

Top dividend stocks are now trading at lower valuations and offering higher yields. Phoenix Group Holdings share price (LSE: PHNX) fits that description perfectly.

Phoenix is ​​an interesting company. With a history of 200 years, it is described as the UK’s largest savings and pensions business, but few people would say so. Group products, such as Ordinary Life again SunLifeThey are very visible (although it is willing to load the latest ones).

Phoenix specializes in managing closed pension plans, which are no longer taking on new clients. This strategy has brought continuous profit growth. On 16 September, Phoenix reported a 15% rise in adjusted operating profit for the first quarter to £360m.

However, it also posted a £646m post-tax loss, which was hit “negative economic diversification from high interest rates and global equities”. Management expects this volatility to ease as interest rates fall.

The dividend news was very encouraging. The Phoenix board serves a “a consistent and sustainable dividend policy” and the board seems confident of keeping it that way. The trailing yield fell 10.24%, the highest figure for the FTSE 100, and is forecast to reach 10.9% this year. Budget growth has been strong, as this chart shows.

Chart with TradingView

Benefits are covered twice by profit. In Phoenix, they are covered once and for all. The board supports this through its merger mechanism, which is designed to protect surpluses. Phoenix says this is paying dividends “very safe”and feels confident enough to raise its half-yearly payout by 2.5%.

Profits seem safe but there are no guarantees

The share price is difficult though. It is down 2% in the last 12 months and down 32% in five years. Most of the FTSE 100 funds are in the same boat.

The 12 brokers that follow Phoenix are forecasting an average price of 573p during the year, which is an 11% increase from today, if correct. Combined with the yield, this would give me a total return of around 22% by 2025.

I would be happy with that. I certainly don’t expect Phoenix stocks to go rogue this year. For that, we need a big drop in interest rates, and it doesn’t look like we’re going to get it. Eventually, prices will drop, and the outlook will brighten.

While I wait, I will reinvest every penny of that booming harvest. The more income, the merrier. No one pays more than Phoenix – and I can’t get enough of it. I will treat any increase in share price as a bonus.