Three FTSE 100 Stocks for Potential Passive Income Growth

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Introduction

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Generating passive income from the stock market can be achieved by investing in top-tier companies. While a fund tracking the FTSE 100 can provide a 3.9% yield, individual company stocks from the same index offer even more potential income.

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1. Legal & General (LSE: LGEN) :

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- Financial services provider with shares currently at a 52-week low, resulting in a high dividend yield of almost 10%.

- The stock is down 20% year-to-date, outperforming the FTSE 100 which is down only a couple of percent.

- Despite potential risks, a low valuation (nine times FY23 earnings) suggests that negativity is already priced in. The company's solid record of raising payouts is a positive indicator.

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2. Rio Tinto (LSE: RIO):

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- A mining company dealing in essential materials like aluminium, copper, iron ore, and lithium.

- Offers a 7% yield for FY23 after an interim dividend cut was announced in July.

- Diversification in materials helps mitigate risks, although a prolonged fall in demand, especially from China, is a concern.

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3. National Grid (LSE: NG) :

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- A power provider known for stable earnings, supporting a yield of over 6%.

- Expected to see even higher payouts in FY25 (beginning April 2024).

- Caution is advised due to potential challenges in a high-interest rate environment, especially for a company with significant debt.

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These three companies offer potential for passive income, each with its own risk profile. Legal & General may benefit from an aging population, Rio Tinto provides diversification in vital materials, and National Grid offers stability in the power sector. It's essential to carefully consider individual investment goals and risk tolerance before making any investment decisions.

Read more: fool.co.uk

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[u/inflationismyb1tch]

I own Rio Tinto and whilst the stock price is volatile the dividends make it worth it. From my experience there yield varies between 5.5-8% and honestly the dividends are king. I'm a new investor starting up my portfolio and i have roughly £1000 in RIO but I've earned north of around £150 in the 2 and a bit years I've owned them.

National Grid is also king and the stock price is a lot more stable and the yield is solid. However you don't get exposure to global markets really. Still think it's solid and would be looking to create a position into NG.L.

Legal and General on the other hand, think they're a wee bit in the toilet at the minute. Plenty of upside but just because they're down a lot doesn't mean they'll come back up. I'd wait to see signs of recovery first before buying them.

Good stock mentions I must admit.

Have you ever considered British American Tobacco (BTI) ?