The Motley Fool

£2k to invest? Here are two FTSE 250 dividend stocks I like yielding 8%!

Image source: Getty Images.

If you have £2,000 to invest and you’re looking for dividend stocks to give you a second income, there are plenty of options on the market right now. The FTSE 250, in particular, is full of bargains for income-seeking investors.

One of these is high-street retailer the Card Factory (LSE: CARD). Most investors wouldn’t touch a high street retailer with a barge pole in the current environment, but I believe the Card Factory deserves a second look.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Indeed, the company seems to be coping quite well at a time when so many other retailers are collapsing, or asking for creditor concessions to help keep the lights on.

Sector-leader

In its latest trading update, published at the end of September, Card Factory revealed sales grew 1.5% on a like-for-like basis during its fiscal first half.

Unfortunately, pre-tax profit declined 14.4% as higher costs hit profitability. Nevertheless, management is confident the company has what it takes to be able to grow at a time when so many other retailers are struggling.

The group is investing in its online business, focusing on personalisation and introducing newer varieties for seasonal festivities like Valentine’s Day. On top of these efforts, management is signing new retail partnerships in the UK and abroad as it grows its market share.

All of these indicate to me the company is well-positioned to navigate the current retail environment and could come out stronger on the other side.

With this being the case, I think the stock is an attractive investment at current levels as it trades at a discount forward P/E of just 9.7 and offers a dividend yield of 8.1%.

Distressed investing

As well as Card Factory, I think Micro Focus (LSE: MCRO) could also be worth your research time.

Following yet another poor trading update at the end of August, investors have been selling shares in this software giant over the past month. After these declines, the stock is currently changing hands at just 6.7 times forward earnings.

However, I think the market is missing something. Micro Focus has a history of issuing trading warnings but, for the most part, it has then gone on to outperform.

For example, following the company’s last major warning in March 2018, when the stock fell around 50% in a few days, it’s shares went on to double in value over the next 12 months.

And I think the same could happen this time around. Even though analysts have revised their growth forecasts for 2019 lower during the past few months, they’re still expecting the group to earn $2.03 (or around 170p) per share for the year.

If Micro Focus hits the City’s growth targets for 2019 without any further disappointments, that looks dirt cheap at current levels. On top of this, shares in the tech business currently support a dividend yield of 8.2%. The distribution is covered twice by earnings per share, so it looks exceptionally safe for the time being.

That’s why I think it could be worth snapping up shares in the business at the current price to take advantage of the market’s short term mentality.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of Card Factory. The Motley Fool UK has recommended Micro Focus. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.