M&G (LSE:MNG) is one of the FTSE 100‘s hottest dividend stocks. Since it was spun out of Prudential in 2019, it’s raised shareholder payouts every year. It speaks to the company’s incredible resilience and robust cash flows (more on both later).
| Year | Ordinary dividend per share |
|---|---|
| 2025 | 20.5p |
| 2024 | 20.1p |
| 2023 | 19.7p |
| 2022 | 19.6p |
| 2021 | 18.3p |
| 2020 | 18.23p |
| 2019 | 11.92p |
Yet that’s not all. Following its London stock market listing seven years ago, dividend yields have averaged an impressive 6.3%. To put that in context, the long-term average for the broader Footsie sits way back at 3%-4%.
Past performance doesn’t guarantee juicy dividends further down the line though. So the question is, can M&G shares continue delivering FTSE 100-beating shareholder payouts?
Bright outlook
I’m confident they can. As its record shows, management’s determined to deliver on its pledge to “maintain a progressive and sustainable dividend policy“. And it has the financial means to make this a possibility.
As mentioned, M&G enjoys a steady flow of cash through the fees it charges on its asset management and pensions services. What’s more, its operations don’t require vast amounts of capital, meaning a high proportion of earnings are converted into cash.
This in turn gives the business rock-solid financial foundations for its dividend policy. At 210% as of December last year, its Solvency II capital ratio was the highest in the sector, and more than double what regulators require.
But here’s the thing. M&G takes a sensible approach to dividends, allowing it to pay a sustainable reward over time. In 2025 its cash-flow-to-payout ratio was 63%. This prudent strategy’s meant the firm’s been delivering large and growing dividends, even as earnings have remained volatile since the start of the decade.
What’s the catch?
Having said that, it’s important to mention the huge competitive pressures M&G faces across its markets. Long-term, the threat from market rivals such as Aviva, Legal & General and Standard Life to revenues and margins will remain a key risk.
However, I’m encouraged by the FTSE stock’s strong record of execution and powerful brand. As demographic changes and increasing demand for financial planning drive market growth, I’m confident profits and dividends will rise over time.
So what are City analysts expecting for the next few years? According to the 11 that rate M&G shares, dividends will rise to:
- 20.95p per share this year.
- 21.6p in 2027.
- 22.34p in 2028.
The result is a huge dividend yield of 6.4% for 2026, moving to 6.8% for next year and 6.8% for 2028. These figures beat the 6.3% yield M&G shares have averaged since 2019
I don’t own this FTSE 100 stock today. But I’m considering adding it to my ISA when I next have cash to invest.
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Royston Wild owns shares in Aviva, Legal & General & Prudential.
