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7.8% dividend yields! 3 FTSE 250 dividend stocks to buy

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At The Motley Fool we spend a lot of time talking about the best FTSE 100 dividend stocks to buy. But that doesn’t mean we limit our scope to just talking about income stocks with the biggest market caps.

Here is a selection of top FTSE 250 income shares I think merit serious attention right now. In fact I’m thinking of buying these dividend stocks for my own investment portfolio.

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6.8% dividend yields!

GCP Infrastructure Investments (LSE: GCP) sits inside the top 10 list of biggest dividend yielders on the FTSE 250. In fact its 6.8% forward yield makes mincemeat of the index’s forward average of 1.8%.

I like this dividend stock for several reasons. It’s well placed to play the trend of rising infrastructure spending in Britain. But unlike many other UK shares in this field, it invests in the debt these building programmes accrue, making it a much less risky proposition. I also like the broad range of sectors it’s involved in, and in particular its focus on the fast-growing social housing and renewable energy segments.

It’s exposure to income-generating infrastructure projects makes it a great dividend stock in my opinion. However, difficulties in finding new assets could affect its ability to grow earnings and dividends later on.

A dividend stock with even bigger yields

Direct Line Insurance Group’s (LSE: DLG) huge yield also makes it a top UK share to buy. In fact its near-term yield sits even higher than that of GCP Infrastructure at 7.8%.

Direct Line also operates in a highly defensive sector, meaning that profits remain stable during economic upturns and downturns. This gives the FTSE 250 stock the means and the confidence to pay big dividends even when broader economic conditions worsen. Spending on general insurance products remains robust even when broader consumer spending power is pinched. And particularly so in Direct Line’s motor insurance market, reflecting the legal requirement for drivers to be covered.

Still, competition in Direct Line’s markets is intense and pressure on its ability to grow revenues could be hard. 

Another FTSE 250 income hero

I’m also thinking of buying The Renewables Infrastructure Group (LSE: TRIG) for my investment portfolio. I don’t just think this dividend stock — which invests in solar and wind farms and battery storage assets — is a great way to turbocharge my income flows. Its dedication to building its renewable energy focussed asset base could deliver terrific earnings growth as demand for low-carbon energy rises, too. The yield here sits at a mighty 5.6%.

This UK share has just signed contracts to acquire four solar PV sites in Cadiz, Spain, to boost its portfolio. It’s a move that also provides it with better geographical and technological diversification. Of course, the temperamental nature of green energy generation could disrupt the amount of electricity it has to sell.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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