For an index of often staid blue-chip shares – some of which do not even pay dividends – the FTSE 100 offers some surprisingly lucrative income shares.

At a time when its average yield is 3.1%, the index’s highest-yielding share offers well over twice that much, at 8.4%.

It also aims to keep growing its dividend per share annually, as it has done over the past few years (and, indeed, in most years since the financial crisis almost two decades ago).

Can it last?

Household name with an ever-evolving business

The share in question is Legal & General (LSE: LGEN). You know, the financial services firm with a multi-coloured umbrella as its logo.

Indeed, that widely known branding is part of the company’s strength when it comes to attracting and retaining customers.

So too is its heritage. Dating back to the nineteenth century, the firm’s long history is also a source of comfort for many customers.

But the company has not stood still.

Its business has evolved significantly in recent decades, with a current strategic focus on retirement-linked products.

That is a market that benefits from enduring demand and large market size. That can mean it attracts a lot of competitors, which is where I think Legal & General’s strengths can help set it apart.

Can the dividend keep growing?

The business itself continues to change.

The sale of a large US operation this year is an example. In the short-term that has raised cash. Longer term, though, it could lead to smaller revenues.

Meanwhile, does the City think Legal & General’s dividend can keep growing? The annual increase has already fallen from 5% a few years ago to 2% now.

That is still growth, in fairness, but weaker growth than before.

The 7% fall in the Legal & General share price over the past five years – a period that has seen the wider FTSE 100 grow 45% — also raises questions about the firm’s prospects in my view.

Why has the City marked the share down when the wider index has moved strongly upwards?

Part of the answer may lie in a lack of perceived growth opportunities. Legal & General is a long-established player in a mature market. Selling the US operation suggests it may be on a path to shrinking, not growing.

But I think the bigger question many investors have is whether the high-yield share can maintain its dividend. The growth rate has slowed. Could it stop altogether – or even give way to a cut at some point?

Worth considering for its long-term prospects…  

I do consider that to be a risk.

I mentioned the business sale above. For the remaining rump of the business, rocky financial markets pose an additional risk.

If asset values fall, that could eat into earnings. Nervous markets equal nervous investors. That might mean the company sees policyholders pulling out more funds than they invest.

Still, Legal & General has proven that its business can be highly cash generative.

Last year demonstrated that again, with capital generation (reported using the Solvency II accounting standard) up 5% to £1.5bn. Given ongoing cash generation opportunities, I think the company could potentially keep growing its dividend in future.

With a long-term perspective, I see this as a high-yield share for investors to consider.

Christopher Ruane does not hold any positions in the companies mentioned.