8.4% annual yield Here is one of my cheap FTSE 100 passive income stocks

Just one week ago, traders and investors were worried that the world's stock markets might fall off a cliff. Not only have these fears failed to materialize (at least for now), the FTSE 100 The stock index has essentially recovered all of its previous losses.

Bargain hunters shouldn't be deterred by this healthy iteration, however. Years of underperformance mean the Footsie remains full of the best value stocks to buy.

So what would I buy if I had spare money to invest? Here is one of my favorites. Dealer forecasts suggest that it could be a cheap way to generate significant income for the next few years at least.

Bargain stock

Aviva(LSE:AV.)'s 2024 annual yield. This makes it one of the highest paying dividends in the FTSE 100 today.

The company also offers excellent value when it comes to projected earnings. City analysts expect earnings here to rise 21% this year, leaving it with a price-to-earnings growth (PEG) ratio of 0.5.

Any sub-1 reading means the stock is undervalued.

There's a lot to like about Aviva. Indeed, I hold its shares in my Personal Savings Account (ISA) again my Self-Invested Personal Pension (SIPP).

I like its excellent brand strength and strong position in fast-growing markets. Demand for retirement, wealth and insurance products is growing exponentially as the population ages in its UK, Irish and Canadian territories.

I'm also a big fan of Aviva's unique monetization. This gives it cash for live investments, acquisitions, dividends and share buybacks. The Solvency II capital ratio is over 200%.

Accidents

But like any share, we have no risk. Profits here are at risk of falling when consumer spending slows in tough economic times.

The business – which also has a large general insurance sector – is also vulnerable to rising claims costs due to climate change.

The Association of British Insurers (ABI) says storms and heavy rain have driven property insurance claims to £1.4bn between April and June. This was the highest number since records began (albeit not long ago, in 2017). It's unlikely to stay high all the time, however, as extreme weather events precede more frequent ones.

That is the dividend yield

But on balance, I think the potential benefits of owning Aviva shares outweigh the risks. I think it can be a great way to make a great second income.

As we can see, City analysts expect profits to continue rising for the next few years at least. This raises the dividend yield to 8.4%, more than double the Footsie average of 3.5%.

I think earnings will rise significantly in the long term as well, supported by the company's accelerating investment in cash-generating businesses to exploit its growing markets.

At 434p, I think Aviva's share price is too low to ignore if I have the money.