2 top FTSE 250 dividend stocks to buy today

The FTSE 250 can be a great place to find top dividend stocks. Here, Ed Sheldon highlights two dividend-payers that could deliver capital gains and income.

| 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.

sdf

The FTSE 250 can be a great place to find top dividend stocks. In this index, there are plenty of under-the-radar companies that have the potential to deliver steady dividends and capital gains.

Here, I’m going to highlight two FTSE 250 dividend stocks I like the look of right now. I’d be happy to buy these stocks for my own portfolio today.

FTSE 250 dividend shares

The first stock I want to discuss is Workspace Group (LSE: WKP). It’s a real estate investment trust (REIT) that offers flexible office space solutions in London. Currently, it has over 60 workspaces and serves over 3,000 small businesses. The yield on the stock is around 2.5%.

Should you invest £1,000 in Computacenter 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 Computacenter Plc made the list?

See the 6 stocks

There are two reasons I’m bullish on Workspace. The first is that the company is well positioned for the new ‘hybrid’ work environment. I’m convinced that the pandemic has changed the way we work forever. In my view, we’re likely to see a lot less mandatory nine-to-five working going forward, and a lot more flexibility in terms of hours. The upshot? Companies are likely to seek out flexible office space.

The second reason I’m bullish is that the London start-up scene is booming right now. According to Tech Nation, there were over 100,000 new businesses launched in the Capital last year. As start-ups get bigger, they require office space. I think Workspace is well placed to benefit from the London start-up boom.

There are risks to my investment thesis, of course. If Covid-19 comes back with a vengeance, and we’re all forced to work from home again, Workspace is likely to struggle. Meanwhile, if we see a big recession, Workspace may not be able to collect rent from its tenants. It’s worth noting that the stock has a higher valuation (a forward-looking P/E ratio of 33), so there’s not a lot of room for error.

Overall however, I think the long-term risk/reward proposition here is attractive.

Growth and dividends

Another FTSE 250 dividend stock I’d buy today is Computacenter (LSE: CCC). It’s a leading provider of IT solutions (cloud computing, cybersecurity, remote work software and more) to businesses and government organisations. The prospective dividend yield on offer here is about 2.1%.

Computercenter is well positioned to generate solid growth in the years ahead, in my opinion. That’s because all over the world, companies are undergoing digital transformation and enhancing business processes with technology. Computacenter is essentially a ‘picks-and-shovels’ business for this trend. It provides companies with the tools they need to become fully digital.

But a risk to monitor here is the current semiconductor shortage that’s impacting the supply of electronic products. In the near term, the chip shortage could cause supply chain issues for CCC and hit profits.

I think this risk is factored in to the share price, however. Currently, the stock sports a forward-looking P/E ratio of just 18, which isn’t high at all, to my mind. It’s worth noting that last month, analysts at UBS upgraded the stock to ‘buy’ and raised their price target from 2,520p to 3,290p. That’s nearly 20% higher than the current share price.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

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.

Edward Sheldon has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

£10k to invest? Here’s a hot dividend share that could deliver a £2,653 passive income over just 3 years

Searching for the best passive income stocks to buy? Here's a high-yielding FTSE 250 dividend share I'm considering for my…

Read more »

Front view of aircraft in flight.
Investing Articles

Shell shares: check out the latest price and dividend forecasts

Harvey Jones assesses the outlook for Shell shares amid a tricky time for the oil and gas sector. Where could…

Read more »

Woman riding her old fashioned bicycle along the Beach Esplanade at Aberdeen, Scotland.
Investing Articles

Check out the latest easyJet share price and dividend forecasts. Time to consider buying?

The easyJet share price has given investors a bumpy ride but looks incredibly good value. Can Harvey Jones see blue…

Read more »

Rolls-Royce's Pearl 10X engine series
Investing Articles

The Rolls-Royce share price hit an all-time high last week. Too late to buy?

Christopher Ruane tries to put the soaring Rolls-Royce share price into perspective as he weighs whether he's too late to…

Read more »

piggy bank, searching with binoculars
Investing Articles

Could this small-cap AIM share be the next big UK growth stock?

Growth stocks can supercharge a portfolio, but come with risks. I'm eyeing one small-cap AIM share that could be a…

Read more »

House models and one with REIT - standing for real estate investment trust - written on it.
Investing Articles

With a low valuation and 5.2% dividend yield, is this the best income stock on the S&P 500?

Mark Hartley explores whether VICI Properties, with its low valuation and 5.2% dividend yield, could be one of the best…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Is the Diageo share price becoming too cheap to ignore?

The Diageo share price has been falling for almost three years now. And Edward Sheldon believes the stock is starting…

Read more »

Engineer Project Manager Talks With Scientist working on Computer
Investing Articles

Down 26% in a year, is this FTSE 100 stock a bargain?

Despite 30 consecutive years of dividend increases, Croda International shares are well off their highs. Is this a buying opportunity…

Read more »