Business & Investment

FTSE 100 shares with a dividend yield of 9.68%? I’m interested!

As an income investor, I want my money to work hard. I make very little money in cash and the Bank of England’s base rate is 0.1%.Potentially chatting around the price Become negative We want to make sure we get better yields later this year.Currently, FTSE 100 shares M & G (LSE: MNG) It offers a dividend yield of 9.68% on stocks traded at around 185p. This makes it easy to get into the top 10 dividend yields available within the FTSE100 Index. But will I buy it?

Why is the dividend yield so high?

M & G is a leading UK-based investment manager. We serve both individual clients and institutional investors through a wide range of savings and investment products. Therefore, it relies on the expansion of assets under management (AUM) as an important way to generate profits. This is to earn commissions and commissions from mutual funds, customers who buy and sell structured products, and because they are custodians.

Two dividends were paid in 2020. The first was paid at 11.92p per share at the end of May. Second at the end of September with 6p per share. Therefore, a total dividend of 17.92p with a stock price of 185p will result in a dividend yield of 9.68%. Going forward, M & G has set the end of April and the end of September 2021 for the following two dividends.They are now Marked It is tentative and subject to change.

It should be noted that we will assume that this yield will be obtained in 2021. This is because, based on historical figures, yield figures of almost 10% are backwards. I don’t know what the yield will be until the 2021 figures are released. There is no guarantee that the dividend per share will remain the same this year. This is a risk I need to be aware of.

Still, with the same dividend policy this year, you can get a very healthy source of income from the FTSE 100 shares.

Is it sustainable?

Operating income for the first half of 2020 was £ 339m, down significantly from £ 714m in 2019. This was primarily due to a net outflow of £ 4.1 billion over the period of savings and investments.However, against this background, the CEO “Our continuous financial and resilient performance.”

In my opinion, if these results are considered positive enough to pay dividends, it is reasonable to expect similar payments this year as well. I think the full-year results for 2020 (until March 9) are promising. This is because M & G has concluded that a net inflow is expected in the second half of 2020 due to the strong recovery of the global equity market in the second half of last year. In addition, a recent Bank of England report has invested an additional £ 125 billion. To a savings account by Britons last year. I think M & G is also benefiting from this move.

But as you can see, we used words like “hope” and “imagination” here. None of my assumptions are guaranteed.

If M & G sees AUM’s continued decline, stock prices could fall. Even if the dividend yield is high, if I sell the stock for a loss, this offsets my overall profit. However, we hope that the inflow increased in the second half of the year. Therefore, the dividend cover should be high enough to continue high yield bonds.

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jonathansmith1 There are no positions in any of the listed shares. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.

FTSE 100 shares with a dividend yield of 9.68%? I’m interested! FTSE 100 shares with a dividend yield of 9.68%? I’m interested!

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