The FTSE 100 might be made up of the largest companies by market cap, but that doesn’t mean some stocks can’t fly under the radar. This is especially true when hunting for income stocks. By looking at future dividend forecasts, some can appear more attractive with careful research.

Distracting with share price gains

One I’ve spotted is M&G (LSE:MNG). At the moment, the dividend yield sits at 7.41%. Over the past year, the share price is up an impressive 35%.

To begin with, some might wonder why I think this stock is flying under the radar for income. The main reason is that, from 2020 through to the start of this year, the share price didn’t move much. Therefore, it was a focus for dividend investors rather than growth. However, the share price has been ripping higher this year, making it a focus for those seeking growth stocks. I believe it has been neglected a bit on the dividend side, as investors have shifted their perspective on the company.

The business has done well this year, with continued client inflows, meaning that assets under management have been swelling. The latest quarterly earnings from last month showed £1.8bn in net inflows, bringing year-to-date inflows to £3.9bn. This is one of the key metrics for the company, as the more it manages for investors, the larger the pool on which to charge management fees and commissions.

It also serves as a good indicator of dividend growth. The business typically pays out income twice a year, with the dividend per share rising for several years straight. Therefore, if it can continue to attract money from investors in the coming years, I expect the dividend to go on.

Looking ahead

In 2025, the company paid a total dividend of 20.2p. For next year, it’s expected to rise to 21.7p, increasing to 23p for 2027. As for 2028, the projection is 24.4p. If we assume the share price stays at 272.6p, this would translate to a dividend yield of 8.95%.

Of course, projecting the potential dividends further down the line isn’t an exact science. The forecasts are provided by experts, but they are still subjective. In theory, companies have no obligation to pay dividends. Investors should remember this, although with a company like M&G, I see it as highly unlikely that a dividend would be suddenly stopped.

Regarding risks, the latest update mentioned “a volatile macroeconomic environment”. This will likely continue into next year, with plenty of geopolitical themes from this year that could prompt people to remove cash from M&G.

Even with these concerns, I still think the stock is underappreciated right now as a dividend option, and could be considered by investors.