THE DAILY ENCRYPT

September 30, 2022

Revealed! The FTSE 100 stocks with the highest dividend yields

Dividends can offer a way to supplement your passive income. So, which FTSE 100 stocks have the highest dividend yields? The post Revealed! The FTSE 100...
earth, network, blockchain-3537401.jpg
earth-network-blockchain-3537401

Dividend payments can offer a nifty way to boost your passive income. Yet, while a number of FTSE 100 constituents pay dividends, yields are sometimes very low.

So, which FTSE 100 members have the highest dividend yields right now? Let’s take a look.

[top_pitch]

What is a dividend yield?

A dividend is the portion of company profits paid to shareholders. Many investors consider such payments as a ‘reward’ for putting their capital at risk by investing in a particular company.

A ‘dividend yield’ refers to the percentage of a company’s share price compared to the dividend it pays out to shareholders. So, if a company with a share price of £100 pays out a dividend of £3 per year, then its dividend yield is 3%.

As a rule of thumb, a dividend yield between 4% and 6% would be considered decent. However, stocks with a lower dividend yield than this shouldn’t necessarily be avoided. That’s because investors may choose to invest in stocks with low dividend yields for other reasons. For example, a stock with a low dividend yield may still have huge potential for growth.

In other words, the rate of a company’s dividend yield is typically just one factor that active investors take into account before picking stocks.

What FTSE 100 stocks pay the highest dividends?

While dividend yields aren’t the be-all and end-all, stocks with high payouts are still favoured by many investors. So, here are the five FTSE 100 stocks with the highest dividend yields right now according to CMC Markets.

Company
Sector
Dividend yield

Rio Tinto Limited
Mining
10.48%

Persimmon plc
House-building
10.29%

Imperial Brands plc
Tobacco
8.56%

M&G plc
Investment Management
8.47%

Phoenix Group Holdings plc
Insurance
7.62%

Let’s take a closer look at each of the five FTSE 100-listed companies that report high dividend yields.

1. Rio Tinto Limited

Rio Tinto claims top spot in the dividend yield table. Officially the world’s second-largest metals and mining company, the organisation reports a hefty dividend yield of 10.48%.

Aside from this high yield, if you’d invested in Rio Tinto at the start of the year, it’s likely you’ll be sitting on a very tidy profit right now. That’s because its share price has climbed by more than 16% since January.

2. Persimmon plc

Persimmon takes second place in the dividend yield table. The house-builder reports a dividend yield of 10.29%.

However, it’s fair to say that Persimmon has had a rotten 2022 so far. That’s because its share price has dropped a massive 23% since the year began, which partly explains its high dividend yield.

3. Imperial Brands plc

The company paying the third-highest dividend yield is Imperial Brands. The tobacco giant’s dividend yield of 8.56% is very respectable, though its share price has fallen 1.4% since the year began.

4. M&G plc

M&G is another share paying a hefty dividend yield. At 8.47%, the investment management company claims fourth place among FTSE 100 constituents, despite being a relatively new member in the UK’s largest share index. Since the year began, M&G shares have risen by 6%.

5. Phoenix Group Holdings plc

At 7.62%, insurance company Phoenix Group Holdings reports the fifth-highest dividend yield. Since the beginning of January, its share price has dropped 3.2%.

[middle_pitch]

What else should you know about dividend yields?

Dividend yields can change regularly. That’s because they are relative to the value of a company’s share price. So, for example, stocks that plummet can report high dividend yields for this very reason.

Yet this isn’t the case for all stocks. Looking at the table above, Rio Tinto is the standout performer. That’s because, as well as boasting a high dividend yield, its stock has also risen this year. That said, there’s no guarantee the company will continue its strong performance in the future.

Are you looking to invest? If you’re looking to invest, bear in mind that the past performance of any stock should not be used as an indicator of future performance.

If you haven’t invested before, then study our investing basics guide to get you started. If you’re ready to open an account, then take a look at The Motley Fool’s top-rated share dealing accounts.

The post Revealed! The FTSE 100 stocks with the highest dividend yields appeared first on The Motley Fool UK.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More reading

Is the current rising NIO share price an opportunity?
How the UK budget 2022 impacts my stock investment portfolio
4 top stocks I’d buy if we see a stock market crash in April
Here’s 1 of my best stocks to buy now and hold!
3 of the best passive income stocks to buy in April

admin

admin

admin

admin

© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Latest News
PRESS RELEASES