Till just a few years in the past, I wasn’t actually serious about receiving passive revenue from a dividend inventory. I used to be targeted on constructing up my portfolio nearly solely by means of progress shares.

Because the gray hairs began to build up although, I grew a fan of a dividend. Although, I wouldn’t go so far as oil magnate John D. Rockefeller, who purportedly mentioned: “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”

When progress shares take a tumble, as they’re doing now, due to tariff fears, then no less than I can console myself with the potential for dividends. I can use the money to both add to my progress shares whereas they’re down or reinvest again into dividend shares to purpose for greater revenue.

Furthermore, it’s a little bit of a delusion that the share costs of dividend shares don’t go anyplace. Trying on the 4 high-yield FTSE 100 shares in my portfolio, three of them carried out strongly on a complete return foundation (dividend and share price) final yr.

A double-digit yield!

Consequently, I might be prepared so as to add one other dividend inventory to the combination, assuming I can discover one which seems suitably engaging. Enter M&G (LSE: MNG), the asset administration agency that demerged from Prudential in 2019.

At its present share price, M&G is sporting a mouth-watering 10% dividend yield. This implies it’s the highest-yielding inventory within the FTSE 100.

However this additionally makes me nervous as a result of earlier ultra-high yielders have ended up slicing their payouts. For instance, the yield on Vodafone shares was above 11% a yr in the past, the very best within the Footsie. Then the telecoms large slashed its payout by 50%!

This makes me surprise if the market is assuming an enormous M&G dividend minimize is on the horizon (at all times a risk).

Rising market mayhem

Then once more, simply again in March, the agency mentioned: “Given our confidence in the outlook of M&G, I am delighted to announce that today we are moving to a progressive dividend policy, starting with a 2% increase for the 2024 total dividend per share.”

This doesn’t sound like an enormous discount is imminent, although M&G is considerably on the mercy of investor sentiment. That is being severely examined in the meanwhile, with President Trump’s tariffs inflicting mayhem.

Final yr, M&G noticed fund outflows, although this was offset by constructive market actions. Between 2025 and 2027, it goals to develop adjusted pre-tax working revenue by 5% or extra per yr, and to generate £2.7bn of working capital.

Nevertheless, as I sort, Goldman Sachs has simply raised the likelihood of a US recession to 35%, up from 20%. So rising ranges of investor angst might result in M&G fund outflows and decrease income. This can be a concern I’ve right here.

My resolution

Weighing issues up, I’m undecided whether or not that is the worst or good time to speculate. What I’m tempted to do then is add shares to my portfolio each three months to work my means right into a place this yr.

This could cut back danger, whereas additionally permitting me to make the most of the massive 10% yield at present on supply.