With markets a bit choppy lately, I have been hunting for opportunities to boost my passive income streams. Here are two dividend shares to buy now for my portfolio that I would choose from the FTSE 100 index.
Legal & General
My first pick would be insurer and financial services company Legal & General (LSE: LGEN).
This is a popular name when people discuss dividend shares and I can see why. The insurance business often generates large cash flows that can help support a dividend. Meanwhile, Legal & General’s powerful brand has allowed it to move into a wider set of financial services. That could help boost revenues and profits in future. Although dividends are never guaranteed, the company has raised its dividend annually in almost all of the past few years and has set out a plan to do so over the next several years.
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All of that makes it attractive to me for my portfolio, especially with the dividend yield currently standing at 7%. That means if I put £10,000 into Legal & General shares now, I would hopefully receive £700 each year in dividends, even before considering any rises.
There are risks to the company. Unexpected events such as hurricanes and storms can push up claims costs, hurting profits. But Legal & General’s long experience of underwriting risks, combined with its strong brand, make me see it as an attractive choice for my portfolio.
Abrdn
The fund manager Abrdn (LSE: ABDN) is also on my list of dividend shares to buy for my portfolio. Indeed, I bought some Abrdn shares this month. At the moment, the dividend yield is 7.5%.
The company owns well-known brands such as Standard Life. A long history in the financial services industry helps it attract clients. Last year it reported £542bn of assets under management and administration, slightly higher than the year before. Fee-based revenue rose 6% compared to the prior year, while profit before tax (using International Financial Reporting Standards) increased to £1.1bn.
However, it has been a challenging few years for the firm. Last year the dividend was held flat. It had been cut by almost a third a couple of years ago and I do not see it getting back to its old level any time soon. An increasingly competitive financial services market has taken its toll on the firm and the revenue growth last year bucked a recent trend of declines. A revamped strategy aims to make the company more relevant to a wider pool of investors, while the dividend cut has hopefully made the payout more sustainable.
For its attractive yield, I have put the company in my portfolio and am happy to hold it there.
Dividend shares to buy now
Both of these 7%+ yielders are attractive to me. I do not expect dynamic growth from them – but if I get 7% a year of my cost base for owning them, I would still be satisfied. I have bought Abrdn and would consider adding Legal & General to my portfolio.
