As a worth/dividend/earnings investor, I’m all the time looking for undervalued shares in good companies. And my purpose as an older shareholder (I’m 55) is to generate ever-higher passive earnings.

Fortunately, there are many high-yielding shares inside the FTSE 100 index. Certainly, I depend at the least 10 Footsie shares with dividend yields of 8%+ a yr.

Passive earnings from blue-chip companies

London’s foremost inventory index presents such engaging money yields partly as a result of it has been weak in 2023. The index has dropped 4.8% within the final six months, leaving it down 0.6% this calendar yr.

Consequently, the FTSE 100 now presents a money yield of 4% a yr — a lot increased than the yields from different main inventory markets. What’s extra, some high-yielding shares provide juicy passive incomes that need to be seen to be believed.

M&G appears to be like good to me

My spouse and I already personal six of the ten highest-yielding FTSE 100 shares, together with three of the highest 4. And one in every of these dividend shares is long-established asset supervisor M&G (LSE: MNG).

On the present share worth of 201.9p, this group is valued at below £4.8bn, making it one of many smaller FTSE 100 firms. However this international enterprise has been going since 1931 and in the present day manages virtually £333bn of economic property for million of shoppers.

What’s extra, M&G inventory has overwhelmed the Footsie (+3.1%) over the previous yr, because the desk under reveals. Right here’s how its share worth has modified over six totally different intervals:

After some summer season weak point, M&G shares have rebounded over the previous month, rising virtually 5%. And although they’ve risen by virtually a sixth over one yr, they’ve misplaced worth since being floated in October 2019.

I personal M&G for bumper earnings

The above figures exclude money dividends, that are magnificent from M&G. That’s why my spouse and I purchased this low cost inventory in August for 199.6p a share. Listed below are M&G’s dividends since its IPO (preliminary public providing) over 4 years in the past:

Word that even throughout Covid-ravaged 2020, M&G raised its dividend by 15.6% over 2019. Likewise, the 2022 payout was up 7.1% on 2021’s distribution.

Passive earnings of £1,972 for all times?

Proper now, this inventory presents a dividend yield of 9.86% a yr. Have been I to purchase £20,000 of those shares on the present share worth, I’d have 9,906 shares (excluding costs). These shares would pay me £1,972 a yr in passive earnings. What’s to not like?

Now for the negatives. Future dividends should not assured, to allow them to be reduce or cancelled at any time. That stated, M&G has loads of spare capital on its steadiness sheet to maintain paying dividends.

Additionally, this group’s future is intently linked to the well being of economic markets. Subsequently, if shares and bonds crash — as they did in 2022 — then M&G’s earnings could be hit exhausting. However the one purpose I haven’t purchased this inventory this month is that we already purchased it cheaply!