The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investors to buy.

The Gherkin building exterior
(Image credit: Getty images)

The FTSE 250 is a market index made up of 250 mid-cap equities traded on the London Stock Exchange. The 250 companies that make up the index are not big enough to be included in the FTSE 100, but they are still some of the UK’s largest publicly-traded enterprises.

However, as James McManus, chief investment officer at Nutmeg, the digital wealth manager notes, “The FTSE 250 is considered more of a place for share price growth than the FTSE 100, because its companies are somewhat smaller, there can be more potential for them to expand.”

What’s more, the FTSE 100 tends to be the first port of call for income investors as “companies on the FTSE 100 are typically larger, which can mean their capacity for returning money to shareholders in the form of dividends is greater.”

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

This is evidenced by the fact that the dividend yield of the FTSE 100 is 3.8% compared to the FTSE 250’s 3.31%.

Still, there are some companies in the FTSE 250 that have great income credentials.

Here’s a list of the ten highest-yielding dividend stocks in the FTSE 250.

Swipe to scroll horizontally
CompanyDividend per share (DPS) for 2023*DPS for 2024*Dividend Yield (%) (2023)Dividend Growth (%) (2023)
Diversified Energy (LSE: DEC)18.3c18.4c15.541.7
Osb (LSE: OSB)35.8p42.7p9.4717.4
Target Healthcare Reit (LSE: THRL)6.13p5.83p8.376.63
Tritax EuroBox (LSE: EBOX)5.08c5.18c8.2839.1
Bank of Georgia (LSE: BGEO)8.40 GEL9.96 GEL8.1344.9
NextEnergy Solar Fund (LSE: NESF)7.52p8.20p85.03
Sequoia Economic Infrastructure Income Fund (LSE: SEQI)6.56p6.94p7.984.99
Direct Line Insurance (LSE: DLG)10.8p15.9p7.2141.9
TP Icap (LSE: TCAP)11.3p12.9p7.114.2
Abrdn (LSE: ABDN)14.614.46.640

*Refinitiv broker estimates

What’s notable about this list is how much it has changed this year.

In 2022, housebuilders and financial services companies dominated the list.

Financial services companies still have a strong presence, but the rest of the list has been replaced by investment trusts (and one oil company).

The list has shifted as analysts have reconsidered their dividend expectations for 2023. They are now expecting many companies in the FTSE 250 to cut their dividends this year as they preserve cash to deal with the challenging economic backdrop.

Direct Line is a great example. It did not pay a final dividend for 2022 as inflation pushed the cost of Insurance claims above its expectations leaving it with less capital than it would like. While analysts are expecting this company to increase its payout in 2023 after this setback, if the economic outlook deteriorates, these projections could look optimistic.

One company that really stands out on this list is Bank of Georgia.

One of the largest lenders in Georgia, it offers investors an interesting way to gain exposure to this fast-growing economy (GDP growth hit 10% last year), and reduce exposure to the UK.

As the bank benefits from Georgia’s economic expansion, it should be able to support its dividend, and there's even headroom for growth.

The dividend yield stands at 8.13% and the stock looks dirt cheap, trading at a price-to-earnings (p/e) ratio of 4.66.

Rupert Hargreaves

Rupert is the Deputy Digital Editor of MoneyWeek. He has been an active investor since leaving school and has always been fascinated by the world of business and investing. 

His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks. 

Rupert was a freelance financial journalist for 10 years before moving to MoneyWeek, writing for several UK and international publications aimed at a range of readers, from the first timer to experienced high net wealth individuals and fund managers. During this time he had developed a deep understanding of the financial markets and the factors that influence them. 

He has written for the Motley Fool, Gurufocus and ValueWalk among others. Rupert has also founded and managed several businesses, including New York-based hedge fund newsletter, Hidden Value Stocks, written over 20 ebooks and appeared as an expert commentator on the BBC World Service. 

He has achieved the CFA UK Certificate in Investment Management, Chartered Institute for Securities & Investment Investment Advice Diploma and Chartered Institute for Securities & Investment Private Client Investment Advice & Management (PCIAM) qualification.