3 dividend stocks with the biggest FTSE 100 yields. Time to buy?

Dividends are an important part of investing and I always hunt for stocks with generous payouts. Now, different sources give different forecast results for the highest dividend stocks. So for my purposes here, I’ll go with what Yahoo! Finance said.

There are some very big dividends in it FTSE 100, at least as far as predictions. And we may not trust predictions too much. But they can help us limit our search for investment income.

#1: M&G

M&G (LSE: MNG) easily leads the FTSE 100 in dividend stocks, with a forecast yield of 11%. If we keep going, we’ll almost recoup our investment in nine years – and still have the stock.

The weakness of the share price in 2023 played a big role in the big results. M&G shares are down 17% since the 2019 demerger from Prudential.

For an investment company, considering the market conditions at the time, I think this is a good result.

I really don’t know if the result will come out this year. But the current forecast shows that it will be maintained until 2024 as well, thus providing support.

Either way, for me, it’s the long-term dividend prospects that matter. And I’m not going to let the short-term stock market outlook get in the way.

M&G is on the list of potential buyers in 2023.

#2: The Phoenix Group

Phoenix Group Holdings PHNX’s most recent dividend yield is 9.3%.

We’ve seen another decline in share price performance, with a 16% decline over the past five years.

This time is part of the hammer that the insurance business is dealing with.

But again, we see no sign of a dividend cut in the pipeline.

The weaker income outlook for the next few years means I’m not too sure about this year’s payout.

However, at least Phoenix raised its 2022 dividend by 5%, which is encouraging.

But I think 2023 could prove to be more difficult, and I would be surprised if there was another 5% increase this year.

But once again, I think we can buy long-term income at a good stock price.

#3: Vodafone

Vodafone (LSE: VOD) has the third largest forecast dividend yield in the FTSE 100 today, at 8.7%.

Dividends have been steady for several years now, but the share price has fallen quite hard.

This time, we’re looking at a five-year decline of 53%.

The big problem is, Vodafone has always struggled to cover its dividend with earnings.

In fact, it just doesn’t get it. Earnings and dividends have been pretty much the same, and that doesn’t look like that will change anytime soon.

Meanwhile, Vodafone is carrying heavy debt. And has used some of what the capital has in the stock buyback.

It clearly prioritizes dividends, which is often good. And I wouldn’t be surprised to see the annual payments continue.

But when I consider the lack of cover by earnings, and debt, I consider Vodafone to damage the overall shareholder value.

I could have bought these two high-dividend stocks when I had the cash to invest, but not Vodafone.