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Having been an investor for almost 4 a long time, my investing technique has advanced over time. These days, I’m an enormous fan of two issues. First, worth investing, which my hero Warren Buffett defines as shopping for into nice corporations at truthful costs. Second, I like accumulating passive revenue within the type of share dividends.
Fabulous FTSE 100 dividends
As a worth/dividend investor, I’ve discovered a lot of my prime shares within the UK’s foremost FTSE 100 index. Certainly, my household portfolio at the moment consists of over 20 completely different Footsie and FTSE 250 shares. We purchased many of those for his or her market-beating dividend yields.
After all, the FTSE 100 is a broad church, particularly when it comes to dimension. For instance, it consists of large corporations valued at a lot as £197.3bn in addition to a lot smaller companies of round £3.5bn. Additionally, not all Footsie shares pay dividends, whereas the best money yields can exceed 9% a 12 months.
Curiously, the overwhelming majority of the FTSE 100’s passive revenue/share dividends comes from only a handful of corporations. In actual fact, greater than half — roughly 53% — of whole FTSE 100 dividends for 2025 ought to come from simply 10 shares.
Three dividend dynamos
For instance, take these three mega-cap UK shares, which collectively pays nearly 1 / 4 (23.4%) of all anticipated FTSE 100 dividends this 12 months:
| Firm | Trade | Share worth | Market worth | Dividend yield | Yearly payout |
| HSBC Holdings | Banking | 994.8p | £172.0bn | 5.0% | £8.6bn |
| Shell | Vitality | 2,690p | £156.3bn | 4.0% | £6.3bn |
| Unilever | Shopper items | 4,551p | £111.3bn | 3.4% | £3.7bn |
The overall anticipated dividends in 2025 from these three international Goliaths involves £18.6bn. That’s roughly £650 for every of the UK’s 28.6m households. Nonetheless, this helpful passive revenue is just for the shareholders of those companies. Additionally, future dividends aren’t assured, to allow them to be minimize or cancelled at brief discover.
Common Unilever
My household portfolio consists of one in every of these dividend dukes: Unilever (LSE: ULVR). We purchased into this Anglo-Dutch producer of fast-moving shopper items for its robust portfolio of manufacturers and its respectable dividend yield.
I see Unilever as a long-term survivor. It was based in 1929, earlier than an enormous US stock-market crash triggered the Nice Despair. Additionally, over 3.4bn of the world’s 8bn folks use Unilever merchandise day by day. In different phrases, its manufacturers aren’t simply well-known, they’re in all places.
Proper now, Unilever shares provide a dividend yield of three.4% a 12 months, barely above the FTSE 100’s yearly money yield of three.2%. However the group has a decades-long historical past of elevating this yearly payout, plus its shares are usually much less unstable than the general UK inventory market.
I sleep effectively at evening realizing that Unilever’s intensive portfolio of manufacturers — in magnificence and well-being, private care, house care, diet, and ice cream — sells as I snooze. Even throughout dramatic downturns, folks should wash, eat, and clear their garments, houses, and themselves.
Alas, the subsequent worldwide recession is coming — the one query is when. In a downturn, shoppers normally tighten their belts. This might possible hit Unilever’s revenues, margins, earnings, and money circulation. Even so, I see this inventory as a long-term maintain for its highly effective passive revenue!
