The Legal & General (LSE: LGEN) dividend yield is a thing of beauty, but the share price? Not so much.

Today, the blue-chip insurer and asset manager boasts a magnificent trailing dividend yield of 8.8%, the highest on the entire FTSE 100 index. It’s not hard to see why it’s one of the UK’s most bought companies. It certainly isn’t due to its stock performance.

Over the last 12 months, Legal & General shares have climbed just 2%. Over five years, they’re down 11%. As a benchmark, the FTSE 100 climbed more than 45% over the same. That’s serious under-delivery. In fact, it gets worse than that.

Why won’t this FTSE 100 stock grow?

Today, Legal & General shares trade at similar levels to December 2014. It’s suffered a lost decade, and then some. Investors will have bagged heaps of dividends but it does beg the obvious question: does the sky-high passive income compensate for the lost share price potential?

There’s one thing worth pointing out. Every time a company pays a dividend, the stock falls to reflect the value coming out of the business. Legal & General goes ex-dividend twice a year. Each time, the shares fall around 4% on the day.

So to a degree, income comes out of growth. But it’s possible to get both. Just look at FTSE 100 rival Aviva. Today, it has a superb trailing yield of 6.4% (and it’s been higher). Yet the Aviva share price has also managed to grow 55% over the last five years.

Interestingly, Aviva shares struggled for years. I know that because I stupidly sold them, just before they took it off. CEO Amanda Blanc has presided over a remarkable turnaround since 2020, streamlining and tightening the business. A quick comparison of the two companies’ full-year operating profits show why Aviva’s winning.

Aviva’s profits started at a lower level, and have risen to a much higher one. Legal & General’s actually fell in 2024, and barely recovered in 2025. Clearly, it isn’t an accident that Legal & General’s shares are idling. But nor is it inevitable.

Can it play catch-up with Aviva?

CEO António Simões is looking to boost growth by unifying its asset management divisions, boosting private market capabilities and scaling the pension risk transfer business. He’s also looking to expand in the US, Canada, Netherlands and Asia, while rewarding investors with a record £1.2bn share buyback. The board plans to return more than £5bn to shareholders between 2025 and 2027. Dividend growth will slow to just 2% though.

The key question now is how well does management executes that strategy? I hold Legal & General in my Self-Invested Personal Pension (SIPP) and will be watching its progress closely, while reinvesting every dividend to build up my stake.

Personally, I think it’s worth holding for the income, but I’m hoping it has the potential to deliver some growth and generate an even higher total return.