These are the 3 top-yielding FTSE 250 stocks in my passive income portfolio

Mark Hartley explains why these three mid-cap stocks make good additions to his passive income portfolio, despite lacking the stability of FTSE 100 shares.

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FTSE 100 stocks tend to dominate my passive income portfolio because I trust them more for long-term gains. With huge market-caps and decades’ worth of business behind them, I feel more confident in their future.

However, there are a few FTSE 250 stocks I’ve added over time because I find their prospects appealing. Whether it’s a solid dividend track record or a competitive market position, these stocks have made their case to secure their place in my portfolio.

OSB Group

With a 7.72% yield, OSB Group‘s (LSE: OSB) the highest-yielding FTSE 250 stock on my list. I recently bought the stock because I like its valuation. Along with loans and savings accounts, this small British challenger bank offers specialist mortgage services.

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

But its exposure to the mortgage market also adds risk. Not only does it face tough competition from the big banks but could be hit hard by defaults if the economy tanks again. 

That may be why its price looks lower than most banks, at only 5.3 times forward earnings. And its price-to-book (P/B) ratio’s only 0.7. Revenue and earnings declined last year but forecasts for next year are good. Analysts expect the price to rise by around 30% on average.

It may be slightly riskier than some of my other bank stocks, but it shows promise. If I had the cash, I’d buy more shares today.

Primary Health Properties

Primary Health Properties (LSE: PHP) is my second-highest yielder, at 7.32%. As a real estate investment trust (REIT), it’s obligated to return 90% of profits to shareholders as dividends. This has helped to ensure it has an excellent track record, increasing dividends at an average rate of 3.4% a year since 2014.

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.

Created with Highcharts 11.4.3Primary Health Properties Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Property’s a slightly risky sector which has suffered recently under high inflation. This has dragged the share price down 37% in the past five years. The recent interest rate cuts are helping turn things around but it could fall further if inflation resumes.

For now, things look good, with earnings forecast to grow at 40% a year. If the price holds steady, the dividends should deliver decent returns next year. I don’t plan to buy more of the shares though as I have sufficient allocation in property.

ITV

ITV‘s (LSE: ITV) had a rollercoaster time since Covid, fluctuating wildly between 50p and 150p per share. Several takeover bids last month added to the fun, with the stock bouncing between 61p and 74p.

Created with Highcharts 11.4.3ITV PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

No offer has been accepted yet but regardless of whether it sells, the vote of confidence could give it a boost. The board believes it’s still on track to make record profits this year, attributing the recent slump to US writer strikes.

Analysts are generally optimistic, with Citigroup reiterating a Buy rating on 5 December. The stock’s fairly undervalued with a forward price-to-earnings (P/E) ratio of 9.5. However, earnings are forecast to decline next year which could threaten dividends.

But if it decides to sell, that’s all perhaps irrelevant to me as a shareholder. So far it’s been a good dividend earner with a 6.83% yield. So I’ll hold my shares and see what unfolds. 

Should you invest £1,000 in Safestore Plc 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 Safestore Plc made the list?

See the 6 stocks

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.

Citigroup is an advertising partner of Motley Fool Money. Mark Hartley has positions in ITV, OSB Group, and Primary Health Properties Plc. The Motley Fool UK has recommended ITV 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.

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