Highlights

• Legal & General paid a final of 15.67p in April 2026 and an interim of 6.24p in August 2026.

• The twelve-month total of 21.91p equals a trailing Yield of 7.12% at a midpoint price of 307.7p.

• A published figure of 21.79p and a 7.38% yield differs by about 0.26 percentage points from the calculation shown here.

• A trailing Payout Ratio of about 188% means distributions exceeded reported Earnings over the period.

Big dividends from big names come with big questions. Legal & General (LSE:LGEN) distributed 21.91p per share across the latest twelve months, split into a large final and a smaller interim. The yield is high for a FTSE 100 company, and the payout ratio is higher still, which is why the numbers deserve a closer read.

The two instalments

The final of 15.67p went ex on 23 April 2026 and was paid on 4 June 2026. The interim of 6.24p went ex on 20 August 2026 and was paid on 25 September 2026. Both are ordinary dividends, and no special Dividend fell inside the 11 November 2025 to 10 November 2026 window. The sum is 21.91p. A published annual figure of 21.79p is about 0.6% lower, a small gap that comes from the exact dates counted. For holders of LSE:LGEN, the final is by far the larger payment.

Yield workings

The latest price was 307.6p to 307.8p on 9 November 2026, a midpoint of 307.7p. Dividing 21.91p by 307.7p gives a trailing yield of 7.12%. A published figure of 7.38% is about 0.26 percentage points higher, which suggests a lower price when it was calculated. Another delayed quote of 305.5p would give 7.17%. With no newer declaration, the forward yield on the same two dividends is 7.12%.

Cover is the question

A trailing payout ratio near 188% means the company paid out almost twice what it reported in earnings on a trailing basis. Payments can continue for a time through cash generation or reserves, but they cannot exceed earnings indefinitely. Dividend growth of about 2.0% on the year before shows that the board has been raising rather than trimming the dividend. Investors should look at cash generation and Capital measures, which insurers often use instead of accounting profit.

Why insurers report differently

Insurance and pensions groups recognise profit over many years, so accounting earnings can differ from the cash they generate. Legal & General (LSE:LGEN) provides life insurance, pensions and asset management, and it often refers to operating cash generation and Solvency measures when explaining its dividend. A payout ratio calculated from statutory earnings may therefore appear very high, even when the board considers the dividend to be supported by cash and capital.

Sector and risk

Legal & General is a financial services company covering insurance and asset management, and it is a member of the FTSE 100. Earnings in this sector respond to market levels, interest rates, longevity and claims. A high yield combined with a payout ratio well above 100% means the dividend relies on cash generation beyond reported earnings. A fall in markets or a rise in claims could reduce the capacity to grow payments.

Reading the dividend pattern

A final of 15.67p alongside an interim of 6.24p means roughly 71% of the annual payment arrives after the full-year results. This pattern can mislead a reader who looks only at the most recent payment. If the interim is multiplied by two, the annualised figure is about 12.5p, which is well below the trailing total. The better guide is the sum of the two payments over a full cycle.

Total return and yield

Yield shows only part of what a Shareholder earns. Total return combines dividends with changes in the share price, so a high yield can still produce a loss if the price falls by more than the income received. The reverse is also true: a modest yield with a rising price can deliver a good overall return. Both parts should be reviewed over a period of several years.

Reinvesting dividends

Reinvesting dividends buys additional shares and allows later payments to be calculated on a larger holding. Over many years, the compounding effect can add noticeably to the value of an investment. Dealing costs and spreads can reduce the benefit for small amounts, so some investors prefer to reinvest when the cash has built up. Others use a reinvestment scheme offered by a broker or the company.

What to watch next

The next milestones are the final results, the full-year dividend declaration and any comments on cash generation and capital. Investors should compare the dividend with operating cash generation, follow the solvency position and note any change in the board's language about dividend growth. Steady increases with sound capital would support the yield of 7.12%.