The Motley Fool

3 FTSE 250 dividend shares I’d buy for my Stocks & Shares ISA today

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Business development to success and FTSE 100 250 350 growth concept.
Image source: Getty Images

With so many stock prices still low after the 2020 crash, I reckon I’m seeing some great dividend yields. Today I’m looking at three FTSE 250 dividend shares that I’d buy for my Stocks & Shares ISA today.

First up is Direct Line (LSE: DLG), the insurance company well known through its TV ads. I’ve always liked the insurance business for its dividend potential, though it does come with a caution. The sector can be cyclical, and dependent on economic ups and downs. 

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Like its competitors, Direct Line slashed its 2019 dividend as a result of the pandemic. But it bounced back to provide a yield of 6.9% for 2020. Forecasts suggest a similar 22p per share for the current year. But a 9% share price decline in 2021 has pushed the prospective yield up to 7.5%.

The DLG share price is down 1.2% over past 12 months overall, but with a volatile path. And it’s still down 13% over two years. With our economic outlook possibly a little fragile, there’s certainly some downside risk here. But, as with my approach to all insurance shares, I see Direct Line as a good income investment for the very long term.

But which is best?

There are quite a few attractive FTSE 250 dividend shares out there, but my eye seems to keep falling on finance-related stocks. My second pick is price comparison site Moneysupermarket.com (LSE: MONY). The company had a tough 2020, but it kept its dividend going to provide a 4.5% yield.

That payment was only poorly covered by earnings, after a hefty 2020 earnings drop, and that does raise a risk. If earnings don’t get back to pre-pandemic levels, I think the dividend could come under pressure. And then, of course, there’s the extensive competition in the price comparison market. Hence the old joke question, how do you pick the best price comparison website?

But on the upside, Moneysupermarket has a decent track record of earnings and dividend growth. It’s a company with little need for big capital expenditure, and has a business with healthy margins and cash flow. If earnings return to pre-pandemic levels, we’ll be looking at a price-to-earnings of around 14. I think that’s good value.

Third FTSE 250 dividend share

Finally, I’m going for another in the money business. It’s Plus500 (LSE: PLUS), the online trading platform. As we’ve seen over the past year, stock markets can be very volatile. As an investor, that teaches me two things. One is to keep away from short-term trading. That’s because every time I buy or sell, I pay a charge, and they quickly add up.

The other lesson is that every time someone buys or sells, Plus500 collects a fee, and they quickly add up. The company has been attracting growing numbers of customers, and trading volumes appear to be consistently high.

Analysts are predicting a dividend yield of 8% for the current year, and it looks like it should be well covered by earnings. There’s a risk that when stock markets settle (which I expect they will), the number of traders looking for short-term profits will drop. In fact, I think that’s likely. But I still see Plus500 as one of the best value FTSE 250 dividend shares I could buy right now.

Our #1 North American Stock For The ‘New-Age Space Race’

Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason…

…because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040.

But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors.

Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation

for now.

That’s why I want to urge you to check out our premium research on this top North American space stock ASAP.

Simply click here to see find out how you can grab your copy today

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.