It’s hard to ignore Phoenix Group (LSE: PHNX) stocks because they offer the highest passive income stream overall FTSE 100 with a trailing return of 10.42%.

The telecom giant Vodafone Group appears to pay more income with a yield of 10.87%, but don’t be fooled. It will halve shareholder payouts for the year to March 2025.

This highlights a recurring problem with big returns like these two. Usually, these skyrocketing returns are down to a falling stock price. The yield is calculated by dividing the dividend per share by the share price, so if the share price falls, the dividend will automatically rise.

Given that struggling companies are often unable to sustain generous shareholder payouts, a high yield can set off alarm bells.

Can the ultra high dividend survive?

Phoenix Group Holdings’ share price has risen a modest 5.14% in 12 months, but over five years it has declined 27.86%. Despite this, I believe its dividends are sustainable and should grow steadily over time.

On Sept. 15, the finance group reported a 15% increase in first-half adjusted operating profit and reiterated targets for both earnings and cash generation. Total cash generated rose 5.79% to £950m. The board is now aiming to reach the top of its range of £1.4bn to £1.5bn in full-year 2024. Markets are now forecasting the yield to rise to 10.9% in 2025.

Currently, 14 analysts offer one-year stock price forecasts for Phoenix Group. They have set a median price target of 576p. This shows cautious optimism, as it would mark a 13.18% increase from today.

If that forecast came true, I’d be looking at a total return of nearly 25% next year. I would be happy with that. I don’t buy FTSE 100 dividend stocks like Phoenix with the aim of making a quick buck. My hope is that the share price rises above periods measured in decadeswhile my reinvested dividends also compound and grow.

It is a brilliant dividend stock

Still, the median analyst forecast is comprised of a wide range of opinions. While five of the 14 brokers rate Phoenix a strong buy, four rate it a strong sell. The most optimistic share price forecast is 680p. That’s an increase of more than 33% from today’s 508p, so I hope it’s right. But the biggest pessimist predicts the shares will fall 5.5% to 480p.

How Phoenix does in practice depends partly on interest rates. Its shares have fallen 9.08% over the past three months as investors now expect interest rates to be higher for longer. That means savers can get a decent return from low-risk cash or bonds and are less likely to risk their capital on stocks like this.

Rate cuts would boost the FTSE 100 in general and financial stocks in particular. We may have to be patient though.

Traded at 15.46 times earnings. Phoenix shares look reasonable. Although recovery takes timeI’m more than happy to wait for Phoenix to rise. And while I’m doing it, I’ll reinvest every dividend it gives me.