Mature black couple having fun with procuring collectively in UK excessive streetI by no means cease being amazed by the quantity of top-quality FTSE 100 corporations paying beneficiant passive income by way of their dividends in the intervening time.Some of these dividends are too beneficiant and liable to be lower (I’m taking a look at you, Persimmon), however not all of them. Insurer Aviva (LSE: AV) tempts me proper now.I’m on the hunt for passive incomeCurrently, Aviva yields passive income of 8.7% a year, lined 1.5 instances by earnings. That is strong cowl, though not utterly convincing. So will the corporate generate the money flows it wants to maintain shareholders comfortable?CEO Amanda Blanc has finished a good job since taking the helm in July 2020, when the share worth stood at 273p. Today, it trades at 439p. Growth has slowed this year, unsurprisingly, however Aviva shares are nonetheless up 5.5% year to date. The FTSE 100 as a entire is down 1.90%.Blanc has turned Aviva into a leaner, meaner operation, promoting eight divisions for £7.5bn and returning £4.75bn to shareholders. Now it’s centered solely on the UK, Ireland, and Canada, which ought to cease its consideration wandering.Last week, Aviva reported a 46% bounce in new enterprise throughout its UK and Ireland life division to £466m in Q3. General insurance coverage premiums elevated too, though different components of the enterprise grew at a slower pace or fell barely.Times are “difficult”, Aviva stated, however it’s nonetheless on monitor to ship it £750m financial savings goal by the tip of 2024. Better nonetheless, it expects to launch a new share buyback programme with its 2022 full-year outcomes, topic to market situations and regulatory approval.If it might afford to launch a new share buyback, that implies to me that the dividend should be fairly safe. In August, Aviva declared an interim dividend of 10.3p, according to its full-year dividend steering of roughly 31p. That additionally seems to be promising. As did Blanc’s bullish outlook, as she reported that “Sales are up, working revenue is greater, our monetary place is stronger”.Aviva shares look low cost, tooThe dividend yield is forecast to dip to 7.1% subsequent year, with cowl shrinking barely to 1.4. Again, I’m not too involved, given the basics. Aviva received’t lower the dividend except completely mandatory, and proper now it faces few critical threats. The firm nonetheless generates hundreds of money.Story continuesAlso, its Solvency II shareholder cowl ratio stood at 223% in Q3, dipping solely barely by 11%. Surplus capital above a 180% cowl ratio elevated from £2.3bn to £2.5bn. It’s a strong operation.What additionally attracts me is that Aviva’s shares look low cost proper now, buying and selling at 7.8 instances earnings. That seems to be like a beautiful entry level, though I settle for the shares have regarded low cost for years so there’s no assure they’ll improve within the close to future.I’m including Aviva to my buy listing watchlist however earlier than I buy it, I additionally need to take a look at FTSE 100 rival Legal & General Group. That is one other dividend aristocrat, yielding 7.51% and buying and selling at simply 7.20 instances earnings. Remarkably related to Aviva, because it occurs. These are good instances to be an investor looking for passive income.The submit I’d buy this stock to generate passive income of 8.7% a year appeared first on The Motley Fool UK.More readingHarvey Jones would not maintain any of the shares talked about in this article. The Motley Fool UK has no place in any of the shares talked about. Views expressed on the businesses talked about in this article are these of the author and due to this fact might differ from the official suggestions we make in our subscription providers equivalent to Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we consider that contemplating a various vary of insights makes us higher buyers.Motley Fool UK 2022
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I’d buy this stock to generate passive income of 8.7% a year
