2025 is shaping up to be the yr of the earnings inventory. The FTSE 100 is filled with high-yielding dividend shares, and I’m banking on producing heaps of passive earnings from my portfolio.

Final yr was disappointing for the UK’s blue-chip index. After a vibrant begin, shares gave up most of their early features as development and confidence pale.

That’s irritating within the brief time period however a large alternative when seen over the long term. And let’s face it, that’s the one timeframe traders ought to think about.

Will Phoenix shares fly in 2025?

Prime dividend earnings shares at the moment are buying and selling at decrease valuations and providing greater yields. Phoenix Group Holdings (LSE: PHNX) suits that description completely.

Phoenix is an intriguing firm. With a 200-year historical past, it’s described because the UK’s largest financial savings and retirement enterprise, but few folks can title it. The group’s manufacturers, like Commonplace Life and SunLife, are extra recognisable (though it’s eager to dump the latter).

Phoenix specialises in managing closed pension schemes, ones that now not take new prospects. This technique has delivered regular revenue development. On 16 September, Phoenix reported a 15% rise in adjusted first-half working revenue to £360m.

Nonetheless, it additionally posted a £646m post-tax loss, hit by “adverse economic variances from higher interest rates and global equities”. Administration expects this volatility to ease as rates of interest decline.

The dividend information was extra encouraging. Phoenix’s board operates a “progressive and sustainable dividend policy” and the board appears assured of sustaining that. The trailing yield is a jaw-dropping 10.24%, the best on the FTSE 100, and it’s forecast to hit 10.9% this yr. Dividend development has been strong, as this chart reveals.

Chart by TradingView

Dividends are ideally lined twice by earnings. For Phoenix, they’re lined simply as soon as. The board helps this through its hedging method, which is designed to guard surplus capital. Phoenix claims this makes the dividend “very secure”, and it felt assured sufficient to boost its half-year payout by 2.5%.

The dividend seems to be protected however no ensures

The share price has struggled although. It fell 2% over the past 12 months and has slumped 32% over 5 years. Most FTSE 100 financials are in the same boat.

The 12 brokers following Phoenix forecast a median price of 573p inside a yr, an 11% improve from at this time, if right. Mixed with the yield, this might give me a complete return of virtually 22% in 2025.

I’d be pleased with that. I’m definitely not anticipating Phoenix shares to go gangbusters this yr. For that, we want a pointy fall in rates of interest, and it doesn’t appear to be we’re going to get it. Finally, charges will drop, and the outlook will brighten.

Whereas I wait, I’ll reinvest each penny of that thunderous yield. The extra earnings, the merrier. No one pays greater than Phoenix – and I simply can’t get sufficient of it. I’ll deal with any share price development as a bonus.