I’ve been scouring the FTSE 100 and FTSE 250 indexes for the best dividend shares to buy. Here are three I believe savvy investors need to seriously consider.
9% yield
At 8.8%, Taylor Wimpey (LSE:TW.) has the twelfth-highest forward dividend yield on the FTSE 250 right now. For next year, the housebuilder’s reading moves even higher, to 9%.
I’ve bought Taylor Wimpey shares myself for passive income. There may be some bumps along the way as Britain’s economy struggles, impacting the housing market. But I’m hopeful the company can keep up its strong record of paying gigantic dividends — its balance sheet is one of the strongest in the sector, with net cash of roughly £327m in June.
I’m especially confident in the builder’s dividend outlook over the longer term. A healthy land pipeline puts it in great shape to capitalise on the UK’s rapidly growing population.
Estate agency Savills reckons average house prices will rise 22% between now and 2030 as homes demand booms.
Green machine
Renewable energy stocks like Greencoat UK Wind (LSE:UKW) have dropped in value on worries over rising new project costs. Falling expectations on near-term interest rate cuts have also weighed on their share prices.
It’s a double-whammy that in turn has supercharged the dividend yields on these shares. This particular FTSE 250 business now commands a whopping 10.2% forward dividend yield. This rises to 10.5% for 2026.
Despite those problems, renewable energy stocks like this remain among the most secure dividend stocks right now. Even if the global economy hits the skids, demand for electricity will remain rock-sold, underpinning the robust revenues and cash flows that energy producers are famed for.
Greencoat UK is one of the largest wind farm operators on these shores (not to mention offshore, too). Helped by the government’s drive to raise green energy capacity, it has significant opportunities for growth as the energy transition accelerates.
A FTSE firecracker
Phoenix Group (LSE:PHNX) is currently the third-highest-yielding share on the FTSE 100. For 2025, its dividend yield is an enormous 8.2%.
For next year, the dial moves to an even-better 8.5%. Dividend forecasts are supported by the financial services company’s deep balance sheet — its Solvency II capital ratio was 175% as of June.
To put that into context, Phoenix’s target range is 140% to 180%. With a Solvency II ratio at current levels, the business has significant resources to reward shareholders with large dividends without compromising its ability to invest for growth. Indeed, RBC Capital analysts think it’s sturdy enough to launch a £250m share buyback programme next year.
As people in its markets rapidly age, I’m expecting dividends to keep rising strongly over the long term as product demand takes off. Sales could weaken in the more immediate future if inflationary pressures keep rising, denting the share price. But that strong balance sheet means I’m not expecting this to impact Phoenix’s generous dividend policy.
