Of course, no company’s perfect. And this firm’s quite a few hurdles to overcome. Nevertheless, if it succeeds, investors may be looking at a lucrative buying opportunity!

Dividends from Europe

Tritax EuroBox (LSE:EBOX) is a diversified warehouse landlord. It specialises in supporting the European logistics industry with properties scattered across the continent. With the rise of e-commerce and increasingly complex supply chains, the firm’s at the heart of many leading brands and businesses, including Amazon, Wayfair, and Samsung.

Since these warehouses are critical to client operations, the lease durations tend to be long. In fact, as of March, the weighted average lease duration of current tenants is 9.5 years. That’s proven to be a powerful advantage in the recent economic downturn as rental income continued to flow despite slower consumer spending.

Needless to say, this recurring revenue model lends itself nicely to a reliable dividend. And it’s how management’s sucessfully hiked shareholder payouts for three years in a row – or 10 years if we ignore the blip caused by the pandemic.

If investors wanted to earn an extra £1,000 each year, they’d need to buy 23,420 shares at the current 6.3% yield. In terms of money, that’s a £15,293 investment. And while that’s a considerable sum, steadily injecting a small amount of capital each month could reach this threshold within a few years, thanks to compounding.

What’s the catch?

Having an extra grand coming in each year’s obviously an exciting thought. But Tritax EuroBox isn’t a guaranteed source of passive income. The FTSE 250 company’s had a few challenges in recent years due to the rising interest rates.

Interest rates have started to come back down. But the ongoing pressure has forced management to sell off some of its properties to shore up the balance sheet. To its credit, the price of these deals has been in line with book value despite the downcycle in the European real estate sector.

Management has a few more locations on the chopping block as it aims to bring the firm’s loan-to-value ratio down to around 40% by the end of 2024. That’s definitely good news for long-term dividend sustainability. However, it also means that rental income’s going to suffer.

Snapping up shares today could be a terrific bargain. After all, the company is currently trading at a 20% discount to its net asset value. And this gap is likely to start closing as more rate cuts are announced. But, it’s unclear what the state of rental income will be once all the disposals are complete. As such, it’s possible that dividends may suffer, putting a question mark on the impressive 6.3% yield.

All things considered, the company’s in my ‘wait and see’ category. But for investors comfortable with a bit more risk, Tritax EuroBox may be worth doing further research.

The post Buying 23,420 shares of this FTSE 250 stock generates £1,000 passive income appeared first on The Motley Fool UK.

Purchasing shares for a second income’s an especially attractive idea this August too. The London stock market has enjoyed a strong rally in 2023. But years of underperformance mean that the dividend yields on many top stocks remain at exceptional levels.

Take the following two FTSE 100 and AIM stocks, for instance. As the below table shows, their dividend yields sail above the current 3.5% average for Footsie shares.

The beauty of these stocks is that they should grow dividends over the long run as well. Here’s why I’d buy them if I had spare cash to invest.

Vodafone Group

Vodafone was for a long time tipped by investors and analysts to cut its dividends. They predicted payouts would fall due to the firm’s high debt levels and significant investment in 5G expansion.

This year, the firm’s finally bitten the bullet and rebased the dividend. Yet despite this setback, I believe Vodafone shares still merit serious consideration from income investors.

At 7%, the telecoms titan’s dividend yield’s still double the Footsie index average. The huge investment it’s making in mobile and broadband could pave the way for solid long-term payout growth too, if profits and cash flows grow as planned.

I’m also encouraged by its plans to double-down on the brilliant Vodafone Business division, and to continue expanding in Africa. Organic service revenues in this fast-growing territory soared 10% in the three months to June.

It remains risky after years of attempted turnarounds and still-high debt.

Yet Vodafone’s transformation programme to fix its balance sheet and cut costs should improve its chances of growing dividends again. This includes a reduction in its global headcount of some 11,000 roles.

Tritax EuroBox

Tritax EuroBox owns and lets out warehouses across Continental Europe. So the reliable rental income it receives allows it to pay a steady dividend to its shareholders.

Demand for the storage and logistics assets it specialises in is booming. This is thanks to themes like supply chain onshoring, the growth of online shopping, and rapid data centre expansion.

On an annual basis, the European weighted prime average rent in this sector rose by 6.6% in Q1. That’s according to research from property firm JLL.

Growth has been cooling, which can’t be ignored. Yet these increases remain far ahead of those seen in other real estate segments. Weak development activity suggests rents should keep rocketing too.

As I said at the top, dividends aren’t guaranteed. But the firm’s policy of paying out at least 85% of adjusted earnings to shareholders is a good omen for income investors.

Current economic weakness in Germany could hamper profits growth in the nearer term. But, on balance, I still believe Tritax EuroBox could be a top stock to consider buying.

The post Two 6.3%+ yielding dividend shares I’d buy in an ISA this August appeared first on The Motley Fool UK.

Growth shares have the potential to increase sales and profits far faster than the broader stock market, and often operate in innovative sectors and/or emerging markets. Dividend shares are usually financially robust companies that provide an income across the economic cycle.

Finally, value stocks offer the possibility of substantial capital appreciation as the market wises up to their true wealth. Or at least that’s the theory.

Thankfully, the FTSE 250 is jam-packed with companies that straddle one or more of these categories. Here are three I think investors should seriously consider right now.

Growth

Rising geopolitical tensions mean weapons spending is rising sharply. Babcock International (LSE:BAB) — which provides engineering and training services to countries including the UK, France and Australia — is one business whose sales (and share price) have rocketed of late.

Latest financials showed revenues up 11% in the year to March, at £4.4bn. The firm’s contract backlog meanwhile leapt 9% year on year to £10.9bn.

Strong order levels mean Babcock’s earnings are tipped to rise strongly through the short term at least. Bottom-line rises of 12% and 13% are forecast for financial 2025 and 2026 respectively.

With Western nations steadily committed to defence budget boosts, I think Babcock could be a top profits grower for years to come too. But I realise that the less volatile world we all long for could mean its prospects diminish.

Dividend

At 6.3%, property company Tritax EuroBox (LSE:EBOX) has one of the largest forward dividend yields on the FTSE 250.

It’s able to reliably pay large dividends over time, thanks to its excellent defensive qualities. It rents out its assets to blue-chip companies such as Amazon, Puma and Lidl, meaning it can expect rents to be paid regardless of economic conditions.

Tritax also has its tenants tied down on ultra-long contracts. The weighted average unexpired lease term (WAULT) on its buildings stood at 9.6 years at the end of 2023.

A failure to identify new sites could harm the company’s long-term investment case. But on balance, I think it could be a great way to play Europe’s booming logistics market.

Value

Real estate investment trusts (REITs) like Assura (LSE:AGR) could remain under pressure if interest rates don’t significantly fall. Yet it’s my opinion that this threat is baked into the ultra-low share prices of many such businesses.

This particular REIT — which builds, owns and operates more than 600 primary healthcare properties in the UK — trades on a price-to-book (P/B) ratio of approximately 0.9.

Any value under 1 suggests that a share is trading below the worth of its assets.

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.

On top of this, Assura carries a mighty 8.1% forward dividend yield. This is more than double the FTSE 250 average of 3.5%.

I think the business could prove a top long-term buy as Britain’s ageing population drives demand for healthcare properties.

The post 3 of the FTSE 250’s best growth, dividend and value shares! appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

IG Group

What it does: IG Group is a global fintech company providing online trading platforms and related educational resources.

By Kevin Godbold. The dividend record for IG Group (LSE: IGG) is stable with zero cuts since at least as far back as 2018. The company even maintained the pay-out through the pandemic. Meanwhile, the compound annual growth rate (CAGR) of the dividend is running at about 0.91%.

With the shares near 802p (20 May), the forward-looking yield is just under 6% for the trading year to May 2025.

The firm has been diversifying and expanding its operations. However, the performance of the business tends to improve with market volatility — when people often trade the markets more. So, there’s some cyclical risk here for shareholders.

Nevertheless, in March the company reported stable revenue year on year, “despite the lowest level of volatility in over five years”.

The trading and financial stability of the enterprise is encouraging, and I’d consider the stock for inclusion in a diversified portfolio of dividend shares.

Kevin Godbold does not own shares in IG Group.

ITV

What it does: ITV is the UK’s largest commercial broadcaster. It also operates a programme production business, ITV Studios.

By Roland Head. ITV (LSE: ITV) has been out of favour with investors for a long time, but I think the tide is starting to turn.

After a tough slump in advertising last year, ITV recently reported a 3% increase in first-quarter ad revenue. Management expects a 12% increase during the second quarter, helped by EURO 2024 football.

ITV also revealed that it has erased the deficit on its large pension scheme, which is now in surplus. No more extra cash contributions are needed, removing a big drag on cash flow.

The risk is that ITV remains a legacy business that’s not big enough to compete with the big streamers.

Personally, I don’t buy this view. ITV has a 33% share of commercial broadcast viewing in the UK and also makes programmes for the big streamers, including in the US.

I think ITV’s dividend now looks safe, giving a 6.4% yield with the potential for growth.

Roland Head owns shares in ITV.

Legal & General

What it does: Legal & General offers retirement, wealth, insurance, investment management and capital investment solutions.

By Andrew Mackie. A recent uptick in the Legal & General share price (LSE:LGEN) means that the dividend yield is not quite as attractive as it was a month ago. However, with a forward yield of 8.4%, I continue to accumulate shares in the company on a regular basis.

The key to dividend investing is sustainability. Between 2020-2023, net capital surplus generation has been £800m higher than total dividends payouts. It comfortably expects this trend to continue in  FY24. Over the longer term, I remain confident that shareholder returns will remain a key tenet of its strategy.

One of the most exciting growth areas for the business is pension risk transfer (PRT). Companies turn to L&G to derisk their defined benefit pension plans. It estimates that only 10% of such pension liabilities have been transacted on to date.

A key risk for the business today remains interest rates. The longer rates remain elevated, the greater the risk that the value of its vast property and bond portfolios get re-rated, thereby impacting profitability. But I take a long term view when investing, and I remain confident in its ability to weather any economic downturn, just like it has done multiple times in the past.

Andrew Mackie owns shares in Legal & General.

Tritax EuroBox

What it does: Tritax EuroBox invests in and manages logistics real estate in Continental Europe.

By Paul Summers: So long as I’m willing to take on (arguably) more risk, I think the dividend stream from warehouse owner and manager Tritax EuroBox (LSE: EBOX) looks very attractive.

The forecast yield currently stands at 7.2%. There aren’t many stocks offering more in the UK market.

While income is the primary focus here, I’m also positive about this real estate investment trust’s ability to deliver a nice capital gain in time, given the high likelihood that online shopping will continue growing in popularity. This means more demand from retailers to rent the sort of ‘big boxes’ it owns.

My chief concern is how long we must wait for interest rate cuts to arrive. Like anything property-related, Eurobox shares have been out of fashion in recent years and I imagine many of its investors are growing impatient.

Staying diversified remains vital, in my view.

Paul Summers has no position in Tritax EuroBox

The post Best British dividend stocks to consider buying in June appeared first on The Motley Fool UK.

I reckon it could be a no-brainer to help me boost my wealth through dividends and capital growth!

Here’s why.

Could interest rate cuts send the shares soaring?

Tritax is set up as a real estate investment trust (REIT). This simply means it’s a property business that must return 90% of profits to shareholders in return for tax breaks and other perks. This type of shareholder return policy is an attractive trait I find myself drawn to.

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.

Higher interest rates have pushed down many stocks like Tritax, as property values have suffered, and borrowing costs have increased. With the potential for interest rate cuts now more realistic than in recent months, I reckon the shares could climb soon.

The shares are down 3% over a 12-month period, trading for 57p as I write, compared to 59p last year. However, I reckon this is where the value lies. So, I’m looking to buy some shares before the the price potentially rises.

Risk vs reward

Tritax’s dividend yield of over 7% is very attractive. Plus, it’s much higher than the FTSE 250 average of close to 2%. However, I do understand that dividends are never guaranteed.

Breaking down Tritax’s valuation, the shares look decent value for money, in my view. They currently trade on a price-to-earnings ratio of close to 13.

Next, the demand for logistics and warehousing space has risen sharply in recent years, especially in the UK. This is mainly linked to the e-commerce boom and changing shopping habits. I know I tend to buy lots online, compared to frequenting my high street once upon a time. It seems I’m not alone.

Businesses need warehouse spaces to cater for this demand, and this is where Tritax comes in. The beauty for Tritax is that Europe seems to be lagging behind in providing such quality spaces. This means growth could be on the cards for the REIT.

The biggest issue I believe Tritax faces is that of continued economic issues. Let me be clear, there is no guarantee that interest rates will be slashed. Plus, even if they are, there’s no telling when that might be, or by how much.

Due to this, Tritax might still be facing issues such as limited growth opportunities due to higher borrowing costs. Plus, the continued turbulence could hurt existing rental agreements. Overall, performance and returns could be hurt here. I’ll be watching closely.

Fortune favours the bold

Despite Tritax’s fate being linked to the economy, the reward outweighs the risk by some distance. Being overly cautious could mean I miss out on a great opportunity. However, it would be remiss of me not to bear the pitfalls in mind.

A large part of Tritax’s potential moving forward is the changing face of shopping, as well as an under penetrated European market space. With a decent set of fundamentals, I reckon there’s more than enough meat on the bones for me to capitalise on here.

The post I’d snap this FTSE 250 stock up in a heartbeat for juicy returns and growth! appeared first on The Motley Fool UK.

Here are two I think savvy UK share investors should consider buying today.

7.2% dividend yield

Tritax Eurobox (LSE:EBOX) has soared as hopes of interest rate cuts have risen. Yet at 59.8p, the company – which owns and operates storage and distribution hubs — still looks cheap to me.

The property stock trades on a forward price-to-earnings (P/E) ratio of 13 times. This makes it cheaper than all of its UK-listed peers, as shown in the table below:

Meanwhile, the dividend yield for this year is 7.2%.

There are multiple reasons why I think Tritax Eurobox has a very bright future. Demand for logistics and warehousing space is tipped to soar in Europe for these reasons:

• Business are accelerating their reshoring and nearshoring initiatives
• Embracing new technological trends (like automation and robotics)
• Reconfiguring their supply chains following Covid-19
• Acquiring space to capitalise on the shift towards omnichannel retailing

This is all tipped to worsen the current property shortage in this market, pushing rent growth still higher. The firm’s own rents are on track to rise 3% to 5% in the current financial year.

Near-term earnings growth could be compromised if interest rates remain around current elevated levels. But on balance, I think the profits potential here is massive.

More spectacular value

When it comes to tremendous all-round value, I feel that Bluefield Solar Income Fund (LSE:BSIF) is hard to top. It trades on a forward P/E ratio of 9.9 times, suggesting — like Tritax Eurobox — that it’s very cheap in respect of predicted earnings.

On top of this, its dividend yield for this year is 8.3%, well ahead of the index’s 3.2% average.

Finally, Bluefield seems cheap to me when I look at the value of its asset portfolio. At 106.4p per share, it trades at a 21% discount to estimated net asset value (NAV) per share of 137.1p.

Building and maintaining green energy infrastructure requires vast amounts of capital. And so this renewable energy stock carries high levels of debt (£577m as of December).

But Bluefield’s strategic partnership with GLIL Infrastructure in late 2023 helps reduce this undeniable risk to investors. GLIL will acquire a 50% stake in a portfolio of more than 100MW of the firm’s assets as part of the deal.

The tie-up will also help Bluefield fund its development pipeline to drive future profits. It had 1.5GW of capacity in its project pipeline at the end of 2023, of which 93MW was under construction.

It’s also worth mentioning the company’s efforts to diversify its portfolio. Of that pipeline, a third is dedicated to battery storage, with the remainder earmarked for solar assets.

This helps the business de-risk its operations, while providing exposure to another rapidly growing industry.

The renewable energy sector is tipped for exponential growth over the next decade. And I think this UK share could be an excellent way for investors to capitalise.

The post These 2 magnificent FTSE 250 shares are on sale right now! appeared first on The Motley Fool UK.

The dirt cheap miner

Copper stocks have soared in 2024, thanks to a resurgent red metal price. Central Asia Metals (LSE:CAML), for instance, is up 11% since the turn of the year. Yet to my mind it’s still a brilliant bargain at 203p per share.

Today, the AIM miner trades on a forward price-to-earnings (P/E) ratio of 8.9 times. It also deals on a price-to-earnings (PEG) ratio of 0.3. Any reading below 1 suggests a share is undervalued.

To sweeten Central Asia’s investment case, the dividend yield for 2024 sits at a stunning 8.4%.

The company operates the Kounrad copper mine in Kazakhstan. It also owns the Sasa lead-zinc mine in North Macedonia.

Demand for all of its metals is tipped to boom as sales of electric vehicles (EVs) steadily increase. It’s why BHP Group has in recent days tabled a £31.1bn takeover offer for Anglo American to boost its copper division.

Some commodity analysts think demand from EVs and related charging infrastructure will double to 5.5m tonnes in 2035. And with new mining projects thin on the ground, copper prices — and by extension profits across the mining sector — could shoot through the roof.

Central Asia’s share price could slump if economic conditions worsen and commodities demand follows suit. But a robust long-term outlook, combined with the cheapness of its shares, makes the miner a top buy, in my book.

The property powerhouse

Tritax Eurobox (LSE:EBOX) is another great UK share with a brilliant blend of low P/E ratios and gigantic dividend yields.

The business — which owns and lets out distribution hubs and warehouses in mainland Europe — trades on a forward earnings multiple of 11.3 times at current prices of 53p.

Its dividend yield meanwhile, clocks in at 8.2%. This is more than double the 3.4% average for all FTSE 250 shares.

Tritax’s operations couldn’t be more different to those of Central Asia Metals. But as with the copper market, supply in the logistics and storage property market is failing to keep up with demand. And this is driving rents at the business rapidly higher.

Like-for-like rental income jumped 4.5% in the 12 months to September. This was up from 3.6% and 2.8% in the previous two years.

The company’s fortunes are linked to the broader economic landscape. So its ability to grow earnings could be compromised if interest rates remain at or near recent highs.

However, those supply shortages I mentioned is helping to support steady rental growth and impressive income collection. Tritax has collected 100% of the rents it’s owed in each of the past three years.

The company’s blue-chip tenant base also helps it to navigate difficult economic conditions. Its major customers include Amazon, Puma, Mango and Lidl.

I think Tritax Eurobox is one of the UK’s most attractive property stocks today.

The post 8%+ dividend yields! 2 top value stocks to consider buying in May appeared first on The Motley Fool UK.

Two real estate investment trusts (REITs) that look attractive to me are Tritax Eurobox (LSE: EBOX) and Supermarket Income REIT (LSE: SUPR).

Before I dive into the investment case for each, it’s worth remembering that REITs can be good passive income stocks. This is because in exchange for tax breaks, they must return 90% of profits to shareholders.

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.

Let me explain why I reckon investors should consider buying some shares in each.

Tritax Eurobox

The business focuses on real estate and warehousing facilities across Europe. It’s been a tricky time for property stocks as inflation and higher interest rates have hurt net asset values (NAVs) and performance. However, the long-term picture looks good, if you ask me.

Tritax shares are down 26% over a 12-month period from 64p at this time last year, to current levels of 47p. This could offer a better entry point for potential investors.

I reckon growth is on the cards because demand is outstripping supply for warehousing properties in Europe. Remember that the e-commerce boom has changed the way consumers shop. Nearly all businesses need some form of warehousing and storage space to cater to this.

It’s hard to ignore a dividend yield of just over 8.5%. However, it’s worth remembering that dividends are never guaranteed.

One bearish aspect that’s worth mentioning is that of heightened competition. Due to the low penetration levels in Europe, there are many firms vying to hoover up the current soaring demand. Low barriers to entry into the industry make it fair game for anyone able to capture this burgeoning demand.

Supermarket Income REIT

The clue as to what the company does is pretty much given away in the name. The firm supplies quality properties to supermarket businesses for e-commerce, fulfilment, warehousing, and more.

Supermarket shares are down 15% over a 12-month period from 85p at this time last year, to current levels of 72p.

The biggest bullish traits for me are Supermarket’s defensive ability, as well as existing relationships. From a defensive view, everyone needs to eat, and this should keep supermarket firms in business. In turn, they need warehousing and other properties to continue their operations.

Looking at existing operations, the business already has excellent relationships with some of the biggest names in the UK. These include Sainsbury’s, Morrisons, and Tesco. Furthermore, the average lease for these properties across its current customer base is close to 13 years. This offers Supermarket Income a level of stability when it comes to revenue and earnings.

Finally, a forward dividend yield of 8.2% is very attractive.

Like Tritax, there are risks that could create issues and hurt payouts. Growth is definitely harder when interest rates are higher, as borrowing costs are increased. Taking on debt is usually one of the ways REITs aim to grow. This new cash funds the acquisition of new properties, in order to rent them out.

The post 2 FTSE 250 stocks to consider buying for powerful passive income appeared first on The Motley Fool UK.

Tritax Eurobox

Property stocks could continue to suffer if interest rates remain around recent highs. But for Tritax Eurobox (LSE:EBOX) — which lets out distribution and warehouse assets across Mainland Europe — things could be looking up.

Dovish comments from the European Central Bank (ECB) this week suggest a rate cut could be coming as soon as June. This would provide net asset values (NAVs) at companies like this with a big boost.

I think Tritax Eurobox could be a strong performer over the next decade. Demand in this property class is strongly growing thanks to phenomena like evolving supply chain management, growing urbanisation, and the steady rise of e-commerce.

And supply is failing to keep up, which in turn is driving rents higher. Like-for-like rents here rose 4.5% in the 12 months to September, up from 3.6% in the prior year and 2.8% the year before that.

A weak development pipeline suggests this trend should continue for the next several years at least. Today Tritax Eurobox carries a huge 8.5% dividend yield.

Supermarket Income REIT

As the name suggests, this FTSE 250 share is a real estate investment trust (REIT). So in exchange for certain tax advantages, it has to pay at least 90% of annual rental earnings out to its shareholders by way of dividends.

This means the forward yield here sits at a vast 8.2%.

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.

Supermarket Income REIT (LSE:SUPR) lets out more than 50 properties to some of the grocery sector’s giants like Tesco, Sainsbury’s, and Morrisons. This strategy provides excellent earnings visibility, as rent collection remains unchanged at all points of the economic cycle.

The company also has these tenants tied down on long contracts. The average lease here has another 13 years to run.

While high interest rates are raising its borrowing costs higher, I think it’s an excellent defensive share for these uncertain times.

Assura

Like Supermarket Income, Assura (LSE:AGR) is a UK-listed REIT. Its focus is on the provision of medical facilities, a property sector which also has significant demographic drivers.

As with grocery outlets, the country’s rising population will call for more primary healthcare facilities in the coming years. But demand for doctor surgeries and the like could grow even faster, in my opinion, given the surging number of older people in Britain.

Assura is well placed to service this need. It owns 612 primary medical facilities and is expanding rapidly (it has delivered 101 new assets in the past two decades).

Changes to NHS policy could hamper profits in the future. But today, the potential benefits of owning this share could well outweigh the risks. Its forward dividend yield stands at 8%.

The post 8%+ dividend yields! 3 FTSE 250 shares for investors to consider buying in April appeared first on The Motley Fool UK.

The Footsie has delivered an average annual return of 7.5% since it began in the mid-1990s. The FTSE 250 has an even more impressive record, producing a yearly average of 11%.

These sorts of return illustrate why investing in stocks and shares can be a better long-term option than simple saving. Share prices can go down as well as up. But spreading capital across a wide variety of companies can help individuals reduce risk, and eventually pave the way for life-changing returns.

Life-changing returns

Let’s say that I have a £20,000 lump sum to invest in a FTSE 250 tracker fund. I like this idea as exposure to hundreds of different companies reduces the impact of company- or industry-specific problems on my returns.

If the index continues delivering that 11% average yearly return I would, after 30 years, have turned that £20k into a cool £534,162. This illustrates the wealth-building power of compounding, where I earn money on any reinvested dividends as well as on the initial sum.

Two top hacks

Whether drawing down a percentage of this each year, or using it to buy an annuity, this sort of return could set me up with a healthy passive income for the rest of my life.

But while impressive, I have two ‘cheat codes’ I believe could help me make an even better return. The first is to invest something extra each month to magnify the compounding effect over time.

Let’s now assume I use an extra £200 a month to buy FTSE 250-listed shares. Using the same timescale and rate of return I would have improved that £534,162 to a whopping £1,095,065. That’s almost double what I’d have made just with that £20k initial investment.

The second wealth-boosting hack would be to select individual stocks to buy. I could supplement this with the addition of a tracker fund. Alternatively, I could diversify my portfolio without using a fund by buying a wide range of companies.

A FTSE 250 stock on my radar

For example, I could target index-beating returns by buying high dividend stocks. The theory is that the large shareholder payouts they deliver would supercharge my compound returns as they are reinvested.

Tritax Eurobox (LSE:EBOX) is one high yielding company I’m considering buying today. At current prices of 51.2p, it carries a mighty 8.4% forward yield, comfortably beating the FTSE 250 average of 3.4%.

On top of this, the business — which lets out warehouses and distribution centres in Mainland Europe — trades on a forward price-to-earnings (P/E) ratio of 11.4 times.

This is well below its five-year average of 19.6 times, and suggests a share price rating could be in order that boosts my capital gains.

Current turbulence in the eurozone economy poses a threat to Tritax in the near term. But the long-term outlook remains highly encouraging, as phenomena like evolving supply chain management and e-commerce growth drive demand for storage and distribution hubs.

The post Here’s how buying FTSE 250 shares could help me turn £20k into a million! appeared first on The Motley Fool UK.