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If you’re a yield-hungry investor like me, now could be a smart time to take a look at some unloved dividend shares. I’ve picked out three FTSE 100 names that are offering yields north of 3.5%, but have largely gone ignored in 2025 despite operating in generally defensive sectors.
Legal & General
I think Legal & General (LSE: LGEN) is worth considering. It has had a decent if unspectacular start to 2025, with its share price gaining 9.4% to sit at 256p as I write late on 16 June. Despite these gains, it remains one of the FTSE 100’s top dividend shares with an 8.4% annual dividend yield.
The company has a market cap of over £14bn and is trading 4% below its 52-week high of 266p. The strong recent gains come after management reported a 6% increase in core operating profit to £1.62bn for the year ended March 2025, and boosted its dividend per share by 5% to 21.36p.
Key risks for mine are the company’s earnings volatility and fierce competition in the asset management space. However, I think its core life insurance and retirement arms could offer long-term revenue streams to underpin its future dividends.
M&G Group
Asset manager M&G (LSE: MNG) is another high-yield dividend share that I believe investors should consider right now. The shares have rocketed nearly 30% higher year-to-date, but the dividend yield is hovering around a juicy 7.8%.
Like Legal & General, M&G shares are sitting just below a 52-week high at 259p. However, operating profit rose 5% in 2024, and management has reiterated its intention to maintain or grow the dividend.
Throw in a recent deal for Dai-ichi Life to acquire a 15% stake in the company and channel $6bn (£4.4bn) in new business to it over five years, and this has helped its valuation skyrocket in recent months.
That’s not to say it’s all rosy for investors in M&G. Persistent fund outflows and market volatility could strain future cash flow, but the high dividend yield does make it one to watch.
British American Tobacco
British American Tobacco (LSE: BATS) has long been a top Footsie dividend share. The company has managed to deliver steady income to shareholders over many years and through the ups and downs of the economic cycle.
The company has a 6.6% dividend yield, but its shares do trade at a price-to-earnings (P/E) ratio of 26.3. That’s above the Footsie average, which makes sense to me as steady dividend payers in defensive industries don’t come cheap.
The company’s dividend has been growing modestly, backed by strong cash flow generation from its core cigarette and next-gen products.
I see regulatory risk and changing consumer behaviours as the key risks here. Increasing restrictions around the use of vaping products, including in the UK, could limit growth. However, I think it’s a tasty dividend yield in a long-time Footsie company that makes it one to investigate further.
Key takeaway
If you’re focused on generating income, these unloved dividend shares may deserve a spot on your radar. They’re not without risk, but for long-term income hunters, the rewards might be worth the wait.
