Tuesday 11 May 2021

FTSE 100's Best Dividend Yielders (Portfolio Buy)

The perennial problem of the DIY Income Investor portfolio - what to do with cash?

Most of the portfolio is tucked up in geographically-spread Exchange Traded Funds (ETFs), diversified between dividend shares and fixed-income. But I do like a bit of excitement from owning individual securities.

CMC Markets has an interesting article about the top 10 dividend payers in London's FTSE 100. Lets take a look at them.
  • Tobacco companies: two of the top ten - Imperial Brands and British American Tobacco. No, I can't buy them, whatever the yield
  • Russian companies: Two companies: Polymental International (Gold and Silver) and Evraz (Steel)  - no go again: no rule of law in that part of the world
  • Housebuilder: Persimmon - I've held them before, so maybe
  • Investment Management and Pensions: M&G, Legal & General, Phoenix Group Holdings - M&G is new, I've held the others before
  • Oil: BP - I hold already
  • Pharma: GSK - I hold already
The one that interests me - because it is relatively new - is M&G.


M&G (LSE:MNG) is, in the words of CMC Markets "... an investment management company that is headquartered in London. It deals primarily with equities, portfolio management, fixed income and real estate, both in the UK and overseas. M&G has provided services to customers for over 80 years and is one of the largest fund management companies in the country." 

M&G split from Prudential in October 2019 and "surprised the market by doing what it already said it would: declare a stable or increasing dividend". Current yield is over 8% with a p/e under 5. It is experiencing some teething problem with  Covid and outflows of retail investor funds but the management remain upbeat. The Chairman resigned recently citing ill health.

Investor's Chronicle thinks M&G is under-valued: 'The fact is, M&G’s yield is so high because parts of its business are valued so cheaply.' - and they rate M&G a 'Buy'.

[Purchase price £2.17}

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

1 comment:

  1. Good to see you back blogging again as this is one of my favourite investing blogs. I quite like the look of LGEN listed in the article with its current yield and decent div history. M&G also looks good if it can sustain its yield.