I’d buy 33 shares a week of this FTSE 100 stock for £1,000 a year in passive income

At FTSE 100 has many high quality dividend stocks. In fact, sometimes I find taking from shame like riches difficult. Literally a dozen Footsie stocks seem to have the potential to provide regular and reliable passive income.

But this Footsie stalwart stands out for me right now.

Boringly dependent

When it comes to dividends, I tend to believe that boring is better. I want to establish a company that operates in the sector that is going to be a thing forever. I want a steady increase in earnings over many years (preferably decades) to support the dividend. And I’d rather see a long track record of raising its payouts.

For me, Legal & General (LSE: LGEN) ticks all these boxes. Founded nearly 200 years ago, it specializes in pensions, asset management, and insurance. It has a long history of impressive cash generation and a strong balance sheet.

The group now has more than £1tn of assets under management. Dividends are well supported, and have not been cut for a long time. As an investor, I find all of this reassuring.

In addition, the stock also looks very good. The price-to-earnings ratio (P/E) is 7.3.

A grand year in passive income

The shares yield a market-beating dividend of 7.5%, which is double the average of the FTSE 100. One share is 253p, as I write. That means I need about 5,155 shares to generate £1,000 a year in passive income. That will cost me a little over £13,000.

Now, that’s a lot of money. It is clear that not every investor can spend that kind of money. But that doesn’t mean I can’t buy shares every week and gradually approach that figure.

For example, if I buy 33 shares of Legal & General a week, the price will be £83.50 (depending on the situation). Which is clearly more affordable. And if it continues every week for a year, I will have 1,716 shares. He will pay £332 a year.

After three years, I have 5,155 shares, which will pay me over £1,000 in annual passive income.

Of course, stock prices won’t be static for three years. It’ll probably be up for a few weeks, which means I’ll be getting a little more stock for my money. And it will also go down for a few weeks, which means I will get more stocks and higher returns.

But the trickle-food money in every week will smooth up and down. It is called the average cost of the pound, and it has actually been proven to be far less risky than if I lumped it in one amount.

Risk

No dividend is guaranteed forever and can be cut at any time. In addition, the UK is already in recession. Legal & Public tentacles extend beyond the UK economy. So no one knows exactly how a company might be affected by an economic downturn.

However, the company’s strong track record and balance sheet give us confidence that the dividend is sustainable. That’s why it became part of my own income portfolio, and I recently bought more shares. When the dividend is paid, I want to reinvest it and generate more income.