FTSE 100 shares are loved for their ability to pay a decent and reliable passive income. So far in 2026, some have also delivered impressive share price growth for investors to cherish.
Take Legal & General (LSE:LGEN) and Aviva (LSE:AV.) shares, two Footsie heavyweights I hold in my own Self-Invested Personal Pension (SIPP). They don’t pay quite as much right now, as their price gains (15% and 11% over six months) have pulled down dividend yields. Yet both still offer yields above 6% for this year.
The question is, are these FTSE 100 dividend heroes still worth consideration? And what’s more, which offers better value for investors today?
Rising prices
Legal & General’s and Aviva’s share prices have soared thanks to three key things:
- Surging core profits.
- Progress towards capital-light businesses.
- Aggressive cash returns to investors.
Both FTSE 100 stocks are delivering earnings growth that are comfortably beating expectations. At Legal & General, first-half core operating profit rose 7% thanks to strong pension risk transfer volumes and asset management business. Meanwhile, Aviva’s core profit jumped 24%, boosted by excellent UK general insurance margins and brisk trading at the wealth unit.
Both are also making impressive progress as they shift towards more capital-efficient models. Aviva generated around 68% of operating profit from capital-light businesses in H1, putting it closer to its 2028 target of 75%. This migration is generating stronger returns while requiring less capital, leaving more cash to return to shareholders.
Speaking of which, L&G and Aviva both raised their half-year dividends (by 2% and 7%, respectively), supporting their enormous yields. They’ve also made further progress with their share buyback programmes. The latter is continuing its mammoth £1.2bn repurchase scheme. Aviva recently completed £350m of share buybacks.
Which is better value?
Aviva and Legal & General shares still attractive value from an income perspective. The former’s dividend yield is 6.1% for 2026, moving to 6.6% for next year. L&G’s yields are even better, at 7.6% and 7.9%.
Of course, dividends are never guaranteed. But I believe the companies’ payout forecasts will hit their mark, not only as profits surge but because of their cash-rich balance sheets too. Legal & General’s Solvency II capital ratio is 210%, more than double the regulatory minimum. Aviva’s is lower but also robust at 176%.
When it comes to earnings, both these dividend shares are also reasonably priced despite their recent brilliant gains. Both trade on a forward price-to-earnings (P/E) ratio of 11.8 times.
But overall, L&G shares look slightly better to me in terms of value.
With wealth, protection and retirement markets growing, and both firms improving their business models, I expect both FTSE 100 shares to remain excellent dividend payers.
Yet the near-term outlook for the share prices are less certain. Firstly, rising inflation could strike revenues growth and push up costs, hitting earnings. Poor growth in key regions like the UK might also dent trading momentum and with it investor sentiment.
On balance, I feel both Aviva and L&G are great stocks for long-term investors to consider. But there are plenty of other tempting FTSE 100 dividend shares that also demand attention…
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Royston Wild owns shares in Legal & General and Aviva.
This story originally appeared on Motley Fool
