6.7% dividend yields! 2 FTSE 250 dividend stocks to buy right now

I’m scouring the FTSE 250 for the best dividend stocks to buy following recent share price reversals. These two top income stocks are currently on my radar.

| More on:

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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

Trading’s been bumpy on the FTSE 250 in recent weeks. Rising Covid-19 rates and soaring inflation have sapped buoyant investor confidence and Britain’s second-tier index is now trading 6% lower from 1 September’s record peaks of 24,290 points.

Looking on the bright side, I think this reversal presents an opportunity to pick up some choice bargains. Indeed, the following two FTSE 250 shares offer dividend yields I believe are too good to miss following recent share price falls. Here’s why I’d buy them today.

An all-round FTSE 250 bargain

There’s a lot I like about ContourGlobal (LSE: GLO) today. For one, I believe it offers jaw-dropping value in terms of both earnings and income. City analysts think the power station operator’s earnings will rocket 345% in 2021.

This results in a mega-low forward price-to-earnings growth (PEG) ratio of 0.1. A reading below 1 suggests that a stock could be undervalued.

Meanwhile, ContourGlobal offers a dividend yield that makes mincemeat of the FTSE 250 forward average of 1.9%. For 2021 this clocks in at a mammoth 6.7%.

I also really like the defensive nature of ContourGlobal’s operations. Electricity is one of life’s essential commodities and the business plays an essential role in providing this. I’m also a fan of the company’s broad global footprint. This gives it exposure to fast-growing emerging markets where energy demand is poised to boom.

Finally, I think ContourGlobal’s decision to concentrate on renewable and low-carbon thermal energy will pay off handsomely as the green revolution clicks through the gears. Though project delivery problems are an ever-present threat — the construction of power plants is a highly complex process, after all — I still think the risk-to-reward profile of ContourGlobal is highly attractive.

A property powerhouse I’d buy today

HICL Infrastructure (LSE: HICL) doesn’t carry dividend yields as large as ContourGlobal. Its 5.1% yield however still packs a hell of a punch. And like the electricity generator, it has exposure to non-cyclical sectors that provide reliable revenues, whatever the weather.

HICL Infrastructure is an investment company which ploughs money into essential infrastructure projects. These include highways, hospitals, railways and schools, the sort of critical assets which produce a steady stream of income and robust cashflows.

The assets it buys up are located both in the UK, on mainland Europe and in North America too. This provides it with added strength through geographical diversification.

There’s always the possibility that HICL Infrastructure could overpay to acquire an asset, or that a project it picks up might fail to deliver on its initial promise. This could result in significant reputational damage that might, in turn, negatively impact the share price.

But I’m impressed by the company’s track record on this front and its proud history of delivering decent shareholder returns. Like ContourGlobal, I think the property powerhouse is a great FTSE 250 dip buy.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Businesswoman calculating finances in an office
Investing Articles

In 12 months, a £10,000 investment in Lloyds shares could become…

Lloyds shares have soared more than 40% since the start of the calendar year. Can the FTSE 100 bank continue…

Read more »

Businessman with tablet, waiting at the train station platform
Investing Articles

Consider these 3 FTSE 100 and FTSE 250 shares for long-term rewards!

The UK stock market is packed with long-term investment potential. Here are three top shares to consider, including one from…

Read more »

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

£10,000 invested in Santander shares 5 years ago is now worth…

Our writer digs into surging Santander shares to see whether they might be a good fit for his passive income…

Read more »

Close-up as a woman counts out modern British banknotes.
Investing Articles

Low P/E ratios and 6%+ dividend yields! Could these FTSE 100 shares be irresistible?

These FTSE 100 shares look highly discounted at today's prices. Does this make them brilliant bargains or possible investor traps?

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

With a 30% increase since the start of the year, does the Barclays share price still offer good value?

In light of an impressive Barclays share price rally, our writer considers the attractiveness of the bank’s stock relative to…

Read more »

British coins and bank notes scattered on a surface
Investing Articles

How much passive income could we earn from UK shares with just £10 per day?

Even with modest amounts of money to invest, we can still consider investing in the UK stock market to generate…

Read more »

Night Takeoff Of The American Space Shuttle
Investing Articles

3 booming growth shares in the Scottish Mortgage portfolio

Our writer highlights a diverse trio of red-hot shares from the portfolio of Scottish Mortgage Investment Trust. Are any worth…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

2 growth stocks absolutely smashing the FTSE 100

If you think the wider FTSE 100 is having a good year (and it is), check out the gains holders…

Read more »