Dividends are never, ever guaranteed, and even the most robust of blue-chips can unexpectedly slash dividends when crises emerge. But backed by its cash-rich balance sheet and improving outlook, I’m optimistic Legal & General (LSE:LGEN) could remain one of the FTSE 100‘s best-paying shares over the long term.

Here’s why.

A proud history

Legal & General’s demonstrated excellent commitment to paying large and growing annual dividends over time. Since 2000, it’s only cut shareholder payouts twice. And both of those occured during the height of the 2008 financial crisis.

The only other blot on its copybook came in 2020, when Covid-19 forced it — along with hundreds of other companies — to rein in their progressive dividend policies. On that occasion, the cash reward was frozen at 17.57p per share in 2020.

But since then they’ve risen steadily, culminating in last year’s 21.36p total dividend.

So what next?

Legal & General has proposed continuing to raise dividends too, albeit at a reduced rate of 2% to 2027. That’s down from 5% in previous years. Yet that’s growth nonetheless, and — as the table below shows — creates dividend yields far above the FTSE 100 average of 3.3%.

These projections are supported by the company’s robust financial foundations. Thanks to its impressive cash generation, its Solvency II capital ratio was 217% in June. This was even after the payment of 2024’s final dividend, and factoring in its recently-launched £500m share buyback programme.

Legal & General believes it will remain robust enough to uphold its dividend targets. It’s expecting £5bn-£6bn of cumulative operational surplus cash generation between over the next three years.

Strong momentum

But as we saw during the pandemic, plans can be knocked off course. And with inflationary pressures rising and tough market conditions persisting, things might not be plain sailing for the company.

This is concerning, considering that projected dividends are barely covered by expected earnings. Dividend cover through to 2027 sits between 1 and 1.1, well below the widely-regarded safety minimum of 2.

However, Legal & General’s resilience means I think it can deliver those impressive dividends. Its latest trading statement showed underlying operating profit rise 6% between January and June, to £859m. This beat analysts estimates by more than £40m.

Though its Asset Management division struggled, this was more than offset by strength at the Retail and Institutional Retirement units. Over the period, the company grew its total retail customer base to 12.4m.

A top dividend share

This robustness — along with that rock-solid balance sheet I’ve described — make me feel Legal & General shares will remain an excellent passive income share to consider during the forecast period to 2027 and beyond.

With demographic changes driving demand for its retirement, protection and investment products, I’m expecting to profits to rise strongly over the long term.