Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

| More on:
Passive income text with pin graph chart on business table

Image source: Getty Images

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.

April’s almost here and it’s a good time to search for the best dividend stocks to buy.

The Stocks and Shares ISA contribution limit will renew on 6 April, so researching and considering these potential investments now may be timely.

Global fintech

The first stock to catch my gaze is IGG (LSE: IGG) in the FTSE 250 index. The firm describes itself as a global fintech company providing online trading platforms and educational resources. To most investors, it’s a well-known spread bet platform provider.

Speculation and investing often go hand in hand, and IG’s services are ever popular judging by the steady cash flow enjoyed by the business.

The stock has been a constant dividend payer since at least as far back as 2018. It didn’t even cut the payment in the pandemic year, unlike some companies.

With the share price near 729p (28 March), the forward-looking yield for the trading year to May 2025 is around 6.5%. That level of potential income’s attractive to me.

However, there are risks. Perhaps the biggest is that the business operates in the finance sector, which is known for its cyclicality. If traders and investors find themselves bereft of spare cash because of deteriorating general economic conditions, IG’s business could suffer.

Nevertheless, City analysts have pencilled in a double-digit percentage advance in earnings for next year and a modest improvement in the dividend.

Trading’s going well right now. In March, the directors reported a stable and active client base and the business delivered a “solid” revenue performance in the quarter.

On balance, and despite the risks, I’d research and consider IG now for inclusion in a diversified portfolio focused on dividend income.

Wealth management and banking

Another company that looks interesting in the financial sector is Investec (LSE: INVP), also found in the FTSE 250 index.

It’s a UK-based international bank and wealth manager, and the dividend record looks pretty good. Like most banks, the business did cut the dividend in the pandemic year, but it came bouncing back.

In 2018, Investec paid a dividend of 24p per share, but for the trading year to March 2025, the payment will likely be about 37p. That strikes me as good progress. However, as with IG, Investec’s exposed to the cyclical risks of its sector.

Earnings, dividends and the stock price can be volatile as the general economy cycles up and down. I think the share price chart illustrates the point:

Nevertheless, on 20 March, the company delivered a robust pre-close trading update and trading statement. Business has been good for the company and the situation looks set to continue, at least for the time being!

 With the share price near 527p, the forward-looking anticipated dividend will yield about 7% for the coming trading year. That looks like an attractive potential income, to me.

 Cyclical outfits like these can be hard to judge. However, on balance, I think these two have qualities worth exploring. I’d be tempted to dig in with further research now with a view to picking up a few of their shares.

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.

Kevin Godbold 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

Young Black man sat in front of laptop while wearing headphones
Investing Articles

Investing just £10 a day in UK stocks could bag me a passive income stream of £267 a week!

This Fool explains how investing in UK stocks rather than buying a couple of takeaway coffees a day could help…

Read more »

Investing Articles

A cheap stock to consider buying as the FTSE 100 hits all-time highs

Roland Head explains why the FTSE 100 probably isn’t expensive and highlights a cheap dividend share to consider buying today.

Read more »

Investing Articles

If I were retiring tomorrow, I’d snap up these 3 passive income stocks!

Our writer was recently asked which passive income stocks she’d be happy to buy if she were to retire tomorrow.…

Read more »

Investing Articles

As the FTSE 100 hits an all-time high, are the days of cheap shares coming to an end?

The signs suggest that confidence and optimism are finally getting the FTSE 100 back on track, as the index hits…

Read more »

Investing Articles

Which FTSE 100 stocks could benefit after the UK’s premier index reaches all-time highs?

As the FTSE 100 hit all-time highs yesterday, our writer details which stocks could be primed to climb upwards.

Read more »

Investing Articles

Down massively in 2024 so far, is there worse to come for Tesla stock?

Tesla stock has been been stuck in reverse gear. Will the latest earnings announcement see the share price continue to…

Read more »

Young Caucasian woman with pink her studying from her laptop screen
Dividend Shares

These 2 dividend stocks are getting way too cheap

Jon Smith looks at different financial metrics to prove that some dividend stocks are undervalued at the moment and could…

Read more »

Investing Articles

Is the JD Sports share price set to explode?

Christopher Ruane considers why the JD Sports share price has done little over the past five years, even though sales…

Read more »