Dividend yields of up to 7%! 3 cheap FTSE 250 shares for a second income

Recent stock market weakness has boosted the dividend yields on UK shares. I think these three top stocks could be great buys for a second income.

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These FTSE 250 stocks are forecast to deliver a healthy second income in the form of dividends in 2023. Heres why I’d consider buying them when I next have cash to invest.

TBC Bank Group

Georgia-focussed TBC Bank Group (LSE:TBCG) isn’t being directly impacted by the war in Ukraine. But the slapping of sanctions on Russia could still hamper profits growth here. After all, the country still does lots of trade with its northerly neighbour.

Yet I still think the emerging market bank has a very bright future. Personal income levels in Georgia are rising strongly, and this is driving demand for financial services. The same is happening in Uzbekistan where TBC also has operations.

Latest financials showed how strongly business continues to grow at the bank. Operating profit leapt 29% in quarter one thanks to higher interest rates and strong loan demand. The bank’s loan book grew 17% at constant currencies from the same 2022 period.

TBC’s shares trade on a forward price-to-earnings (P/E) ratio of 4.5 times. They also carry a 7% dividend yield, more than double the FTSE 250 average of 3.3%.

Centamin

Owning gold mining shares can be a great way for investors to reduce risk. During economic and political crises, prices of the safe-haven metal tend to rise. This can offset weakness elsewhere in an individual’s portfolio.

Centamin (LSE:CEY) is one such mining stock I’d buy today for extra protection. Its shares trade on a P/E multiple of just 9.8 times today. Meanwhile its dividend yield stands at a healthy 4%.

I’m attracted by the company’s steps to supercharge production over the next few years. The Africa-focused miner remains on track to produce half a million ounces of gold a year from 2024. It also has a string of exceptional exploration assets in its portfolio (it released strong pre-feasibility results at its “economically robust” Doporo project in Burkina Faso just last month).

A falling gold price could have a significant impact on Centamin’s profits. But right now bullion prices have a good chance of hitting new record highs as concerns over the global economy grow.

Bluefield Solar Income Fund Limited

Profits at renewable energy producers are highly vulnerable to weather conditions. When the sun doesn’t shine or the wind fails to blow, power generation can fall sharply.

However, I still believe Bluefield Solar Income Fund (LSE:BSIF) is a solid buy for dividend income. Because its solar assets are spread across the Midlands and South of the UK, the risk to group profits from adverse weather is much reduced.

Purchasing energy producers like this is also an attractive option as the British economy splutters. Electricity demand remains largely constant even during downturns, meaning revenues here should remain solid. This is why City analysts expect dividends here to rise again this year, resulting in a 6.9% dividend yield.

I think profits at Bluefield could grow strongly over the long term too as the transition to renewables from fossil fuels accelerates. I don’t think this is reflected in the company’s low forward P/E ratio of 9.9 times.

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.

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