The FTSE 100 index soared to a record high this year as European stocks continued to do well. It peaked at £8,908 on Monday, up by over 77% from its lowest point in 2020. It was trading at £8,660 ahead of the upcoming Liberation Day.
The Footsie index has a dividend yield of about 3.5%. This article looks at some of the top FTSE 100 shares with the highest dividend yields to buy and hold in 2025.
Legal & General (LGEN)
Legal & General is one of the highest-yielding stocks in the FTSE 100 index, with a dividend yield of 8.76%. That yield means that a £100,000 investment in the company will bring in about £8,700 a year in dividends.
LGEN is one of the biggest players in the insurance and investment industry in the UK, with over £1.1 trillion in assets. The most recent results showed that the company’s business continued doing well in 2024 as its core operating profit rose by 6% to £1.6 billion. The profit before tax jumped to £542 million.
The Legal & General share price has done well this year, rising by over 12% from January. This trend may continue as investors swing to defensive stocks as the trade war heats up.
Taylor Wimpey (TW)
Tylor Wimpey is another top FTSE 100 stock with a high dividend yield. It pays a yield of about 8.6%, even after the company announced that it would slash its payout this year. This explains why the Taylor Wimpey share price has crashed by 31% from its 2024 highs.
The dividend cut came as the company’s growth slowed. Taylor Wimpey’s annual revenue dropped to £3.4 billion in 2024 from £3.5 billion a year earlier, and £4.4 billion in 2022. This happened as the number of housing unit completions dropped to 10,593 from 14,154. Its annual profit dropped to £320 million.
A dividend cut is never nice since it leads to smaller returns over time. Still, analysts expect that Taylor Wimpey will return to growth once the ongoing challenges stabilize.
Vodafone (VOD)
Vodafone is another high-yielding FTSE 100 index stock. Like Taylor Wimpey, the telecom giant slashed its dividend in 2024. Even so, Vodafone has a dividend of 7.7%, much higher than the FTSE 100 index average.
Vodafone’s revenue rose by 5% in the third quarter, with its service revenue rising by 5.6% to 7.9 billion euros. This growth came from its Africa, Europe, and UK and was partially offset by Germany, where its revenue tumbled by 6.4%.
Vodafone hopes to continue growing steadily, especially after its merger with the UK’s Three concludes this year.
British American Tobacco (BAT)
Tobacco stocks are known for their high dividend payouts. Most recently, most companies in the industry, including BAT, Altria, and Philip Morris, have done well.
BAT has a dividend yield of 7.7%, making it one of the biggest ones in the FTSE 100 index. Its dividend will likely be stable over time because of its business performance. While its sales are not growing so fast, the company’s cost actions have made it highly profitable.
Other top yielders in the FTSE 100 index
Many other FTSE 100 index constituents have a higher-than-average yield. Some of the top blue-chip stocks to consider are firms like Rio Tinto (6.5%), WPP (6.6%), Aviva (6.37%), Schroders (6%), HSBC (5.76%), and BP (5.5%).
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