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Having been an investor for practically 4 a long time, my investing technique has developed over time. These days, I’m a giant fan of two issues. First, worth investing, which my hero Warren Buffett defines as shopping for into nice corporations at truthful costs. Second, I really like amassing passive earnings within the type of share dividends.
Fabulous FTSE 100 dividends
As a worth/dividend investor, I’ve discovered lots of my high shares within the UK’s important 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.
In fact, the FTSE 100 is a broad church, particularly when it comes to dimension. For instance, it consists of big 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 yr.
Curiously, the overwhelming majority of the FTSE 100’s passive earnings/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 virtually 1 / 4 (23.4%) of all anticipated FTSE 100 dividends this yr:
| Firm | Business | 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 entire anticipated dividends in 2025 from these three world Goliaths involves £18.6bn. That’s roughly £650 for every of the UK’s 28.6m households. Nevertheless, this priceless passive earnings is just for the shareholders of those companies. Additionally, future dividends should not assured, to allow them to be minimize or cancelled at brief discover.
Common Unilever
My household portfolio consists of one among these dividend dukes: Unilever (LSE: ULVR). We purchased into this Anglo-Dutch producer of fast-moving client items for its robust portfolio of manufacturers and its first rate 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 Melancholy. Additionally, over 3.4bn of the world’s 8bn individuals use Unilever merchandise day-after-day. In different phrases, its manufacturers should not simply well-known, they’re all over the place.
Proper now, Unilever shares provide a dividend yield of three.4% a yr, 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 night time realizing that Unilever’s intensive portfolio of manufacturers — in magnificence and well-being, private care, residence care, vitamin, and ice cream — sells as I snooze. Even throughout dramatic downturns, individuals should wash, eat, and clear their garments, houses, and themselves.
Alas, the following worldwide recession is coming — the one query is when. In a downturn, shoppers often tighten their belts. This may seemingly hit Unilever’s revenues, margins, earnings, and money movement. Even so, I see this inventory as a long-term maintain for its highly effective passive earnings!
