Analysts expect big dividend jumps from these FTSE 250 income stocks

These are some of the FTSE 250 stocks I like as I believe they could reward dividend investors strongly in the coming years.

| 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.

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.

The idea that the FTSE 100‘s for income stocks and the FTSE 250‘s for growth stocks is based on a line that’s increasingly blurring.

There’s only room for 100 stocks in the top index. But there are far bigger numbers that are capable of providing rising long-term dividend income.

Banking returns

The Investec Group (LSE: INVP) share price has had a great few years. It’s up 22% in the past 12 months alone. Confidence, it seems, is returning to the bank sector.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Created with Highcharts 11.4.3Investec Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

But even after those strong few years, the forecast dividend yield still stands at a nice 6%.

But then it gets better, as analyst forecasts show the cash rising in the next few years. If they’re right, Investec dividends could climb by 28% between 2024 and 2027.

What’s the catch? Well, one risk is that earnings look likely to drop in the 2024-25 year, before they start to pick up again from 2026.

The bank sector still faces risk too. And I think share prices might still stay weak until interest rates come down a fair bit more.

But the specialist bank and wealth manager’s on a forecast price-to-earnings (P/E) ratio of only about eight, dropping below seven by 2027. I’d say that gives it a fair bit of safety margin.

It’s got to be one for dividend investors to consider, surely.

Pet profits

Pets At Home Group (LSE: PETS) could be set for an even bigger dividend rise over the same timescale.

Created with Highcharts 11.4.3Pets At Home Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

In this case, the share price hasn’t had such a good ride. But we’re still looking at a pretty decent 4.2% dividend predicted for this year.

But more importantly, the City experts think we could see a 33% rise from 2024 to 2027. Now, dividends are never guaranteed, and forecast ones are even less certain. But that’s a very nice gain, in my book.

There’s one possible cloud on the horizon though. The Competition and Markets Authority’s looking into suspicions of overcharging on the vet business, and it could cover Pets At Home.

But I think I see some strong growth potential here. And a P/E dropping to 11 by 2027 looks low for a growth stock to me, especially in such a long-term attractive market.

The company seems to agree, and is buying back a load of its own shares right now.

Mid-cap dividends

Those are just two FTSE 250 stocks where I see dividend growth. But I have my eye on others that offer some tempting yields.

I think this is a great time to consider buying real estate investment trusts (REITs). The share prices of many of them have been punished. And that’s even ones that don’t rely on asset values for the cash that pays their dividends.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

I’m thinking of Primary Health Properties, with a forward yield of 7.2%, British Land and its 5.7% yield, and Assura up at 8%, among others.

All have their risks, which investors need to check. But yields like that make good starting points.

Amazing Nerd Stock smashes FTSE with 1,346% gains

What makes this company so extraordinary?

It has a cult-like following of nerdy fans who tend to spend lots of money…

potentially handing investors market-beating gains in any economy.

Though past performance does not guarantee future results, last year, this amazing company saw:

  • Double-digit revenue growth - to a total £470,800,000
  • Profits explode 46%
  • Insiders buying a monster £492,000 of shares

…Setting investors up for - what could be - another decade of spectacular returns.

Want to consider joining them?

Then grab this special report: ‘One Top Growth Stock from The Motley Fool’ which includes both the risks and opportunities.

Secure your FREE copy now

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.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Plc, Pets At Home Group Plc, and Primary Health Properties Plc. 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

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Dividend investors! Here’s what Warren Buffett says builds wealth in the stock market

Reinvesting dividends at yields of 8% or higher looks like a good way of building wealth. But Warren Buffett has…

Read more »

Calendar showing the date of 5th April on desk in a house
Investing Articles

Here’s my Stocks and Shares ISA plan for 2025-26

A Stocks and Shares ISA helps investors avoid taxes on dividends and capital gains. And Stephen Wright has a plan…

Read more »

Dividend Shares

Of the 20 highest-yielding FTSE 100 stocks, this is my top pick

This FTSE 100 stock currently offers a yield of 6.4%. But Edward Sheldon believes it’s capable of providing share price…

Read more »

Investing Articles

Could Tesla’s share price jump over the next 12 months? These analysts think so!

Tesla's share price has fallen by almost a third since 1 January. But optimism is high that Elon Musk's company…

Read more »

Investing Articles

I asked ChatGPT where the FTSE 100 will be in 6 months: here’s what it said…

Let’s be realistic, ChatGPT can’t predict the future. But it did do a good job of compiling data from brokerages…

Read more »

Investing Articles

Could the Rolls-Royce share price hit £10?

The Rolls-Royce share price has taken most analysts by surprise with almost everything going right for the British engineering giant.

Read more »

Investing Articles

4 REITs Fools own for passive income

REITs often have higher-than-average dividend yields compared to other stocks, making them a solid choice to consider for passive income…

Read more »

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »