The Motley Fool

2 of the best FTSE 250 dividend shares to buy in the UK today

Image source: Getty Images.

One way I’m navigating the economic fallout from the coronavirus pandemic is through buying shares in cheap, dividend-paying UK shares. Although nothing can be guaranteed, this should generate a passive income stream. And, hopefully, capital gains once markets fully recover. With this in mind, here are two stocks from the FTSE 250 I think fit the bill.

Record results 

Not every company has suffered at the hands of the coronavirus. For evidence, take a look at today’s record results from online trading platform Plus500 (LSE: PLUS)

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...

Total revenue soared a massive 146% to $872.5m in 2020, thanks to “unprecedented levels of platform usage“. A total of 82 million trades were placed by customers over the period, compared to around 35 million in 2019. This goes some way to highlighting just how popular trading has become over the multiple lockdowns we’ve endured.

Naturally, there’ll come a time when markets and trading activity begin to settle.  Indeed, Plus500 said today is expected revenue in 2021 to “grow from more normalised levels” achieved in 2019.

Even so, I think the dividends on offer still make Plus an attractive option for those looking for income. Right now, analysts are predicting it will return 83.6 cents per share (60p) in FY21. That becomes a yield of 4.4% at today’s share price. As well as being far better than the interest rates offered by even the best Cash ISA, this income looks likely to be easily covered by profits.

Naturally, Plus500 won’t be to every investor’s taste. The ongoing threat of regulation in its industry could keep the share price in check, even if the company succeeds in becoming a “multi-asset fintech group“. This may be one reason why the FTSE 250 member’s valuation — at just 9 times forecast earnings — appears low relative to the market as a whole.

For those looking for their dividend fix, but wary of buying Plus at its peak, I think there’s a great alternative in the index. 

Quality… on the cheap

Another FTSE 250 stock offering great income right now is price comparison site Moneysupermarket.com (LSE: MONY). In fact, this is one of the reasons I began building a position in the company last year.

Analysts currently have the company returning 11.3p in FY21. That translates to a yield of 4.2%. I think that’s sufficient compensation for being patient while trading recovers. In spite of the foggy earnings outlook, I suspect we could see a big increase in demand for the company’s services from UK holidaymakers looking for travel insurance once restrictions are lifted.

Sure, MONY isn’t without risk. It’s certainly not the only option for those looking to compare prices on financial products. There’s also the opportunity cost of not investing elsewhere to consider. After all, the share price has been stuck in the 200p-400p range for the last six years! To me, this would imply that big capital gains look unlikely in the near term.

Nevertheless, I like the valuation. A forecast price-to-earnings (P/E) ratio of 18 feels reasonable for a company that has the quality hallmarks I look for. These include a good brand, net cash on the balance sheet and high operating margins.

On top of this, MONY also generates great returns on capital employed — a key metric used by fund managers such as Nick Train and Terry Smith to separate the wheat from the chaff. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Paul Summers owns shares in Moneysupermarket.com. The Motley Fool UK has recommended Moneysupermarket.com. 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- 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.