I like the prospects of passive income with high -quality dividend performance. I am considering FTSE 100 financial services Legal and general (LSE: LGGU) as a high -quality company. There is a immense customer base and a proven business model for centuries. Legal and general dividends are also something that I like very much. Its profitability 8.8% puts the company to the most generous dividend payers in the Blue-Chip index.

However, high performance can be a red flag, which expects the city to take place in the future and valued participation accordingly. 8.8% of the legal and overall dividend efficiency is much more than twice as high as the average index, which is currently 3.5%.

Legal & General has increased dividend every year in recent years and plans to do so. But it determined the waiting for a lower annual augment in dividend to share (2% instead of 5%) from this year. What does this mean for me as a shareholder?

I plan to keep

The answer may not be: not much.

I plan to suspend my legal and general actions because I think that the dividend’s profitability remains very attractive. Although a slower growth rate is not a brilliant news, the performance is already much above the average, and even low one digit percentage dividends per share can make it even more attractive.

The company feels enough with cash to regularly buy its own shares. Indeed, this month the company announced plans to spend half a billion pounds to buy its own shares.

Last year, its basic operational profit increased. But the profit before taxation using the IFRS accounting standards was more modest, in the amount of 542 million GBP compared to 1.6 billion GBP for basic operating profit. Accounting in financial services can be devilishly complicated. This may make it arduous for investors to get a very vivid picture of how the company operates at the granular level.

But while the earnings have fallen, Legal & General is still profitable and has proven ability to generate immense sums of surplus cash. This is significant because these are such free cash flows that allow the company to finance dividends.

Maintaining realistic expectations

But although the juicy legal and general dividend still attracts me, I also have to keep my enthusiasm in reality.

The price of the shares increased by 51% in five years.

It sounds great, but above all it reflects the crisis during the pandemic. Over the past year, share has dropped by 4%.

Because the company reduces the size due to the sale of assets, I think its price can fight for growth, although the plan to buy its own shares can aid in this regard.

A lower dividend growth rate, although still in a positive territory, can also be a sign that the company sees potentially lower future business growth prospects than before.

So I am excited about the potential of the dividend of my legal and general participation, but I maintain my expectations when it comes to the results of stock prices.