We traditonally look for dividend shares to buy in the FTSE 100. Right now though, there are more double-digit dividends outside the top London stock market index.
Today, I want to line up some of the FTSE 250 dividend yields I think investors will be considering now.
The following table shows five of the top forecast yields, mostly pushed up by share price falls. I haven’t picked the biggest as there’s a lot of sector overlap. I’ve just gone with the ones that most catch my eye.
Should you invest £1,000 in Ithaca Energy right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Ithaca Energy made the list?
FTSE 250 yields
| Company | Dividend yield | 12m price change |
| Ithaca Energy (LSE:ITH) | 24% | -32% |
| NextEnergy Solar Fund | 12% | -17% |
| Abrdn | 10% | -15% |
| Ashmore | 9.7% | +2.1% |
| Supermarket Income REIT (LSE: SUPR) | 8.6% | -14% |
The 24% yield from Ithaca Energy makes me ask why isn’t everyone piling in? And I’ll also check out the Supermarket Income REIT, a real estate investment trust I’ve liked the look of for a while.
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.
Share prices
Two things strike me about that chart. Those are not what we really want to see from these supposed growth stocks in the FTSE 250.
And it shows a disappointing early life for the Ithaca share price since the oil company came to market in November 2022. It’s not a great start, which only adds to the mystery.
Unusual oily
Ithaca plans to pay $500m in dividends for 2024 and 2025. But forecast earnings would cover only about half of it. The company also had adjusted net debt of £428m at Q3 time.
Still, the acquisition of oil and gas assets from Eni could see 150,000 barrels a day from the North Sea by the early 2030s. That’s close to BP‘s output from the region.
But it’ll probably mean the issue of a lot of new shares. So that massive yield already looks like it’ll be diluted. But by how much?
The puzzling combination of huge dividends not covered by earnings from a company likely to raise capital through an equity issue makes my head hurt too much to invest. I might be missing a great chance, but I’ll pass.
On dry land
Back to the boring old supermarket thing. Pressure on retail, stagnating property market, interest rates still high… who in their right mind would want to take on that combination in an investment trust that owns and rents supermarket properties?
Well, me for one. Supermarket Income REIT is definitely on my candidates list for early 2025.
I just hope the market doesn’t come to its senses and push the price up before I can buy any. Or, then, with the risks facing retail right now, maybe it’s my senses that are out of line.
Still, buying food and running the premises to buy it from seem like two of the surest long-term cash cows out there, to me.
Buy in 2025?
So that’s one dividend stock I won’t buy because I really can’t get my head round it. And one that makes my shortlist. The other three tempt me too. I’ll have to dig into them another time.
