8% dividend yield! I’d buy this cheap FTSE 100 stock today for passive income

Earning passive income is an ambition shared by investors around the world. After all, what’s not to like about the idea of ​​making money without lifting a finger?

More importantly, earning passive income does not require a pile of cash up front. Setting aside a manageable amount of money every day is enough to start creating a serious income stream from your investment portfolio.

But if I could only pick one FTSE 100 stocks to get the ball rolling on your journey to earning a lucrative passive income? Yes, I would not hesitate to choose this for my portfolio.

A company with an illustrious history

A multinational financial services company Legal & General (LSE: LGEN) was founded in 1836 with the aim of safeguarding the financial future of people around the world.

Today, the business helps more than 10 million people with savings, retirement, and life insurance.

The company has a strong market position in the UK financial services industry with a comprehensive product portfolio that insulates business risks.

Strong financial performance

Legal & General’s full year results were impressive.

Earlier last month, the group reported full-year operating profit of £2.5bn, up 12%. On top of this, cash generation of £1.9bn was up 14%.

The only division to see profits decline is Investment Management, where market movements affect the value of investments.

This highlights the ongoing risks for the group I will be looking at. After all, turmoil in the financial markets in the future will not be beneficial for the portfolio.

In addition, if the banking sector’s problems persist and put pressure on the global economy, businesses like Legal & General may experience reduced profits.

However, alongside the results, the board proposed a full-year dividend of 19.37p, up 5%.

A bumper dividend yield

As a result, Legal & General’s dividend yield is currently around 8%. You will be hard-pressed to find a higher result than that across the entire FTSE index.

However, buying shares in a company just because of its high yield is not a wise strategy. It is important for me that the company’s dividend is sustainable if I want to build a stable passive income.

So, what makes Legal & General a more attractive investment in my eyes is that the bumper dividend looks good at current levels.

To illustrate, the group’s cash and capital generation remained strong, up 14% and 10% respectively.

Shares are undervalued

Combined with the interesting results, I think the Legal & General stock can also be undervalued.

The group’s shares are currently trading at a price-to-earnings (P/E) ratio of around 6.2. To put these figures into context, the FTSE 100 average is around twice that.

Even considering the fact that low-growth businesses traditionally trade at a discount, in my eyes, the group’s shares still offer significant value.

So, above all, I wouldn’t rule out some share price growth on top of a good dividend payout.

If I have money to spare, I like to buy Legal & General stocks for my portfolio to start my journey to build passive income.