Legal and general (LSE: LGEN) offer excellent dividend yields. I’m already holding it FTSE100 insurer and asset manager, but I’m tempted to buy more within this year’s Stocks and Shares ISA allowance. What if I go all in?

I was usually reluctant to invest in just one stock. I bought L&G shares three times last year but only invested £4,000 in total. Maybe it’s time to be more courageous in your beliefs.

L&G achieves record profitability of 8.8% per year. However, I don’t want to only get that return for a year or two. I want to receive this for decades.

I want growing dividends

Very high yields are notoriously sensitive, and dividend cover has recently fallen to as low as 0.4. I want payouts to my shareholders to be covered twice by profits.

Markets continue to expect yields to escalate to 9.1% in 2024, with improved coverage of 1.1. It’s better this way, but it doesn’t give me complete peace of mind. However, Legal & General has a forceful history of increasing dividends over the last decade. Let’s see what the charts say.

Chart by TradingView

On June 12, the management board presented the dividend strategy for 2024–2027. It has committed to increasing the dividend by 5% in 2024 and by 2% thereafter.

However, markets were not impressed. Over the past month, the Legal & General share price has fallen by 8.44%. Even a £200 million share buyback and the promise of more shares did not improve their mood.

The company has been frustrating investors for some time. The stock is down 13.25% in five years. They are up just 2.48% over the last 12 months.

Management currently aims to achieve compound annual core operating earnings per share growth of 6% to 9% over the next three years, with an operating return on equity of over 20%. If this falters, investors won’t like it.

The stock price should automatically escalate when interest rates finally start to fall. This will make its record yield even more attractive compared to cash and bonds. A recovery on the stock exchange would result in an escalate in the prices of all financial companies.

Frustration on the FTSE 100 index

Despite the problems, the stock is not budget-friendly. When I bought them, they were earning about six times. Its price-to-earnings valuation suddenly shot up to 33.35 times.

Chart by TradingView

This is due to a keen drop in earnings per share from 12.84p in 2022 to just 7.35p in 2023. The board’s recovery plan should do a better job of fixing this.

The savings and pensions market presents a long-term opportunity because we cannot rely on the state to provide a comfortable retirement. However, Legal & General failed to achieve this.

If I invested up to the full ISA limit of £20,000 pounds at today’s share price of 232.1p, I would buy 8,617 shares. If the dividend per share of 20.34p increases by 5% in 2024, I can expect 21.36p. This would give me a staggering passive income of £1,840 per year. Given the risks, I lack the courage to go all-in. I will continue to invest another 4k. pounds.