The FTSE 250 is filled with some enormous dividend yields right now. And while the index as a whole only averages a 3.4% payout, the top-10 dividend payouts are far more generous. Some stocks even stretch into double-digit territory.
So what are these seemingly enormous passive income opportunities? And should investors be considering these stocks for their own dividend portfolios?
10 huge yields
The 10 largest payouts in the FTSE 250 as of March 2026 are:
- SDCL Efficiency Income Trust (LSE:SEIT) – 13.7%.
- Renewables Infrastructure Group – 11.1%.
- Foresight Environmental Infrastructure – 10.9%.
- Greencoat UK Wind – 10.7%.
- Bluefield Solar Income Fund – 10.7%.
- TwentyFour Income Fund – 10.3%.
- Victrex – 9.9%.
- Energean – 9.9%.
- GCP Infrastructure Investments – 9.4%.
- Sequoia Economic Infrastructure – 8.5%.
Combined, this basket of businesses and trusts generates a chunky 10.5% payout – almost three times what their parent index offers. But as all experienced income investors know, a high yield doesn’t guarantee a high passive income.
In fact, it can often be a warning sign that a dividend cut might be right around the corner. With that in mind, let’s dig a little deeper and look at the biggest yield on the list.
Opportunity or trap?
SDCL Efficiency Income Trust (or SEIT) is arguably one of the more complex income stories on the London Stock Exchange right now.
As a quick introduction, the trust manages a diversified £1.2bn portfolio of energy efficiency infrastructure assets scattered across the globe. And despite having an enormous near-14% yield, shareholder dividends are actually covered by cash flow. What’s more, this coverage is actually improving.
As of September 2025, SEIT’s dividend cash coverage ratio stood at 1.2, up from 1.1 a year ago, with cash inflow from its investments growing by 20%, from £48m to £58m year on year.
That’s obviously an encouraging signal. So then why are SEIT shares trading at a gargantuan 48% discount to their net asset value (NAV)?
The problem is debt. SEIT has a lot of it. So much so that the group’s gearing is a staggeringly high 71.9% of NAV, firmly breaching the group’s self-imposed limit of 65%.
As a consequence, the firm’s in the process of selling off assets to bring down leverage. But if these assets cannot be sold at fair value, the group’s ability to reduce debt could force some structural refinancing at a time when interest rates are still elevated.
To make matters worse, the board publicly stated that it may not recommend that shareholders vote for the company’s continuation, signalling a potential wind-down that could see the entire trust come to an end.
A special situation
The CEO of SEIT has since pulled back on the comments of a potential wind-down. And the group’s dividend coverage suggests that the 13.7% dividend yield is here to stay for now.
Where uncertainty creeps into the dividend picture is 2027 and beyond. If asset sales fail to bring down leverage, dividends may end up on the chopping block.
So is the potential reward worth the risk? This FTSE 250 stock isn’t a traditional income opportunity. It’s a special situation with a near-guaranteed short-term dividend, but substantial uncertainty over the medium-to-long term. And as a long-term investor, that’s not something that tickles my fancy.
