An 8.6% yield? Here’s the dividend forecast for a FTSE 100 income hotshot

Over the previous yr, the dividend yield for Authorized & Basic (LSE:LGEN) shares hasn’t fallen under 8%. That’s spectacular, and it presently ranks because the highest-yielding inventory in your complete FTSE 100. But I don’t assume that is only a flash within the pan. Once I contemplate the forecasts for future revenue funds, issues may get even higher.

Dividend particulars

Authorized & Basic usually pays out two dividends a yr. The primary will get declared in March, coinciding with the full-year outcomes, with the opposite coming in August. The one in March is often bigger than the summer season one. In 2025, the 2 funds totalled 21.48p. When factoring within the present share value, it provides a dividend yield of 8.09%.

Wanting forward, analysts count on the overall for this yr to be 21.9p, rising to 22.35p subsequent yr. As for 2028, the forecasts point out a complete dividend per share of twenty-two.79p.

I don’t know the place the share value might be in a few years’ time. But when I assumed it was the identical as it’s now, the yield may rise to eight.64%. The truth is that inventory costs change day-after-day. This might imply the dividend yield’s larger or decrease than my projection.

Shifting gears

It’s true that Authorized & Basic dividends aren’t assured. However after I look again over the previous decade, it’s paid out revenue yearly. So this goes some method to considering that issues may proceed in the identical method for the subsequent decade.

This isn’t blind religion, it’s based mostly on how the enterprise is performing. The 15% rise within the share value over the previous yr is a sign of the great work occurring. Other than having fun with core working revenue progress, it’s accomplished very nicely with the pension danger switch (PRT) division. It is a worthwhile, high-cash-flow a part of its institutional retirement enterprise, with H1 2025 outcomes displaying new PRT enterprise greater than doubled to £3.4bn, with a pipeline of an additional £1.7bn.

The corporate additionally handed regulatory stress exams in November, based mostly on theoretical situations of falling rates of interest or a inventory market crash. Though I’d be stunned if they’d failed, the stamp of approval’s good, because it reveals that the corporate has loads of capital buffers to face up to tough instances.

Danger and reward

When it comes to dangers, as a significant UK insurer and pensions supplier, it’s uncovered to regulatory and political modifications. These may not be optimistic, doubtlessly capping and even decreasing future progress or dividend prospects.

The underside line for me is that Authorized & Basic’s proved itself as a stable dividend inventory over the previous few years. Based mostly on the outlook for the corporate and the dividend particularly, I believe buyers can contemplate it as a part of a long-term revenue portfolio.