Unveiling Hidden Gems: High Dividend Yields in the FTSE 250
The FTSE 250 may not be the first place investors look for high dividends, but there are hidden gems within the mid-cap index that offer lucrative yields, with forecasts indicating they are only set to rise further.
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abrdn:
- Forecast dividend yield: A staggering 10.8%
- The weak share price, plummeting 54% in the past five years, has contributed to this high yield.
- Despite a recent Q3 update causing a 10% decline in shares, broker forecasts signal stability in dividends until at least 2026.
- Uncertainties loom around the company’s transformation program and stemming outflows, but if successful, the 10.8% yield and a price target increase of 35% could drive investor interest.
- OSB Group:
- A specialist mortgage lender offering a 9% dividend yield.
- Forecasted to rise to 9.3% by 2026, with ample earnings cover.
- Share buybacks signal confidence from the board, especially with a low forward price-to-earnings ratio of 4.6.
- Despite challenges leading to a 19% stock decline post-interim report, the company’s market cap of £1.4bn pales in comparison to bigger players like Lloyds Banking Group.
While small banks may face hurdles in economic squeezes, OSB’s attractive valuation and high dividend yield present an enticing opportunity for bold investors.
In conclusion, the FTSE 250 houses a treasure trove of high dividend yielding stocks with promising futures. By looking beyond index labels, one can uncover rewarding opportunities and prioritize the underlying business strength over market categorizations. Invest wisely and unlock the potential of these dividend darlings.
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