Have £5k to spend? 2 FTSE 250 dividend stocks I reckon could make you an ISA millionaire

Royston Wild discusses a couple of possible fortune makers from the FTSE 250 (INDEXFTSE: MCX). Dare you miss out?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

What a little beauty Homeserve (LSE: HSV) has proven to be for its investors. Thanks chiefly to a staggering 265% share price spike since 2014, the emergency callout specialist has delivered a 300% total shareholder return in that time. And I’m convinced it’s not done yet.

Homeserve’s success on foreign shores is the cornerstone of its bright investment case and, in particular, the soaring progress it’s making in the US. Revenues from its Stateside territory boomed 18% in 2018, a result that pushed group sales 12% higher from the prior year.

North America has now displaced the UK as the company’s biggest business by the number of customers, reflecting the recent acquisition of the home repair services business Dominion Products and Services as well as savvy marketing which brought 1.2m more customers onto its books last year. And Homeserve continues to invest heavily in this hot market to keep sales on the up-and-up. For example, it’s also bolstered its presence in the $29bn heating, ventilation, and air conditioning (HVAC) market.

Should you invest £1,000 in Big Yellow Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Big Yellow Group Plc made the list?

See the 6 stocks

Dividend hero

Homeserve has delivered some staggering double-digit earnings growth over the past five years and City brokers expect it to keep on trucking. Profits are anticipated to swell 9% and 10% this fiscal year and next, numbers which, in turn, prompt predictions of more handsome dividend growth.

Indeed, the FTSE 250 firm’s payout policy is what makes it really stand out. Ordinary dividends have been hiked 86% during the past five years and are anticipated to keep swelling, to 23.5p this year, and 25.8p for the following period.

True, there are bigger yields out there than Homeserve’s 2.1% and 2.3% for this year and next, respectively. But I would argue that its progressive dividend programme makes the company a brilliant buy for your ISA, given the prospect of some really mighty yields in the years ahead.

Another income great

If you’re looking for big yields today, then Big Yellow Group (LSE: BYG) might be more up your alley. Dividends here have also sprung higher in recent years — by 53% to be exact — and are expected to keep doing so. Thus payments of 35.3p and 37.7p are forecast for this fiscal year and next, respectively, ones that yield inflation-bashing figures of 3.6% and 3.8%.

Big Yellow has thrived in recent years as the rising numbers of renters in Britain has helped drive demand across its self-storage facilities, as has the steady growth in the hoarding culture. These two themes are seemingly going from strength too, making the structural shortage in available space ever more worse.

Now Big Yellow has already delivered a total shareholder return of 123.4% over the past five years. I’m certainly not expecting it to stop generating great gains for its investors, particularly as it expands its store network to capitalise on these terrific structural opportunities. It’s another white-hot buy in my book.

Should you invest £1,000 in Big Yellow Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Big Yellow Group Plc made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Homeserve. 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.

More on Investing Articles

Smart young brown businesswoman working from home on a laptop
Investing Articles

Have I left it too late to buy Nvidia shares?

When the whole world was racing to buy Nvidia shares, Harvey Jones decided they were overhyped. Does the recent dip…

Read more »

Dividend Shares

I asked ChatGPT to pick me the best passive income stock. Here’s the result!

Jon Smith tries to make friends with ChatGPT and critiques the best passive income pick the AI tool suggested for…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Hargreaves Lansdown’s clients are buying loads of this US growth stock. Should I?

Our writer's noticed that during the week after Christmas, many investors bought this US growth stock. He asks whether he…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Greggs shares plunge 11% despite growing sales. Is this my chance to buy?

As the company’s Q4 trading update reveals 8% revenue growth, Greggs shares are falling sharply. Should Stephen Wright be rushing…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

Will ‘biggest ever Christmas’ help keep the Tesco share price climbing in 2025?

The Tesco share price had a great year in 2024. And if 2025 trading continues in the same way, we…

Read more »

Investing Articles

This dirt cheap UK income stock yields 8.7% and is forecast to rise 45% this year!

After a disappointing year Harvey Jones thinks this FTSE 100 income stock is now one worth considering for investors seeking…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

With much to be cheerful about, why is this FTSE 250 boss unhappy?

JD Wetherspoon, the FTSE 250 pub chain, is a British success story. But the government’s budget has failed to lift…

Read more »

Chalkboard representation of risk versus reward on a pair of scales
Investing Articles

2 huge investment risks I’m worried about in 2025

Ken Hall looks at two big investment risks that are keeping him up at night as we enter 2025 with…

Read more »