I’m constructing a balanced portfolio of FTSE dividend shares to generate the passive revenue I must take pleasure in a snug retirement. However what if I may solely purchase one? In that case, I’d must take a really totally different method.

A one-stock portfolio may provide some benefits. I may go for a super-high-yielder, like wealth supervisor M&G, and bag a whopping revenue of virtually 9% a yr. Whereas M&G’s shareholder payouts seem safe for now, that’s nonetheless a dangerous technique. Plus its share price has struggled to develop.

Alternatively, I may play comparatively protected and purchase transmissions monopoly Nationwide Grid, which at the moment yields 5.47%.

But the utility’s share price crashed in Might after it introduced plans to lift £7bn to speed up its transition to renewable energy. It has internet debt of greater than £40bn, and I’m not comfy with that. So I wouldn’t purchase Nationwide Grid by itself both.

I’d purchase Lloyds Banking Group

Unilever is one other strong FTSE 100 blue-chip I’d take into account for my one-stop portfolio, nevertheless it doesn’t pay sufficient revenue, at the moment yielding lower than 3%.

Oil big BP yields 5.39%, which is sweet. Its shares are dust low-cost too, buying and selling at six occasions earnings. But the vitality sector is cyclical, oil exploration is dangerous and we nonetheless don’t understand how BP will negotiate the shift to internet zero.

I’d fortunately maintain all 4 of those in a portfolio of dividend revenue and progress shares, however I wouldn’t make them my sole picks. If I had to decide on only one inventory for all times, it might be Lloyds Banking Group (LSE: LLOY).

I do know, I do know, that’s a bit uninteresting. However in a means, it must be uninteresting. My nerves can be in shreds if I purchased one inventory and it was all around the store.

However this doesn’t imply Lloyds will keep away from the swings and roundabouts that comes with investing in equities.

Prime FTSE 100 dividend progress inventory

As we noticed within the monetary disaster, issues can nonetheless go badly fallacious. Though I’d prefer to suppose we’ve realized from that. We actually realized that the large banks are too massive to fail, and should be rescued if required.

I’ve chosen Lloyds over the opposite FTSE 100 banks as a result of it sticks to the fundamentals of non-public and small enterprise banking, which reduces its danger profile. It’s nonetheless uncovered to the ups and downs of the UK economic system, which has been very bumpy these days with Covid, the cost-of-living disaster and all the things else. However when investing in shares, it’s unattainable to keep away from danger collectively.

The Lloyds share price appears to be like good worth buying and selling at 7.4 occasions earnings, roughly half the FTSE 100 common of round 15 occasions. That’s regardless of the inventory climbing a formidable 36.3% in a yr. The trailing yield has shrunk consequently although, to simply 4.8%.

Nonetheless, administration is aiming to extend dividends yr after yr, and the forecast yield is extra spectacular at 5.6%. Higher nonetheless, that’s coated twice by earnings, which is fairly comfy. 

As I stated, it will likely be insanity to put money into only one inventory. But when somebody put a gun to my head, my sole passive revenue choose can be Lloyds.