As the race for jobs in what looks likely to be an Andy Burnham-led government gets under way, I thought I’d conduct a little challenge of my own. I’ve identified two FTSE 250 dividend stocks with similar characteristics — each one costs around 100p per share and yields around 8%.
On the surface they look similar income plays, but once I dig into the numbers, they tell very different stories. So which matters most if you’re hoping to live off these dividends for years?
A reliable REIT vs a fast-growing equipment vendor
I already own a few shares in the real estate investment trust (REIT) Primary Health Properties (LSE: PHP), but it never hurts to consider other options.
It owns government-backed, long-lease healthcare facilities across the UK and Ireland. For 30 consecutive years it’s increased its dividend, with a current yield around 7.92% and a 2025 payout of 7.1p per share.
But strict REIT tax rules means it currently pays out essentially all adjusted earnings as dividends. That suits investors who want maximum cash today, but it leaves limited room to reinvest or cushion any shocks.
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.
In the opposite corner is ME Group International (LSE: MEGP), which runs instant-service equipment such as photobooths and self-service laundry machines across Europe.
In 2025, it raised dividends 9.5% to 8.64p per share, representing 58% of earnings per share (EPS). That’s consistent with its policy of paying out at least 55% of profit and works out to a dividend yield of about 7.9%.
Profitability and valuation
On profitability, ME Group earns a net margin around 17.9% and delivers return on equity (ROE) of 30.8%. Primary shows a higher net margin of 56.6% but a more modest ROE of 8.6% – typical for a leveraged property vehicle.
Valuation also differs. Following a sharp price dip, ME Group now trades on a price-to-earnings (P/E) ratio of just 7.34. Meanwhile, Primary sits closer to 13.86 – so ME looks more like a bargain today.
Balance sheets also matter for income durability. ME Group has net cash of £26.5m, a quick ratio of 1.17 and debt-to-equity around 0.25, pointing to comfortable liquidity and conservative borrowing.
Primary’s debt is roughly in line with equity, with a current ratio about 0.5 and a quick ratio below 1, so it relies more on debt funding.
Side-by-side comparison
| Metric | Primary Health | ME Group |
|---|---|---|
| Dividend yield | 7.92% | 8.4% |
| Payout ratio | 107.58% | 58% |
| Dividend growth | 2.9% | 9.5% |
| ROE | 8.6% | 30.8% |
| Net margin | 56.6% | 17.9% |
| P/E ratio | 13.86 | 7.34 |
| Approximate annual income on £10k | £792 | £840 |
Risk comparison
Primary’s cash flows depend on UK and Irish healthcare budgets, NHS policy and property valuation yields. Higher interest rates or political pressure on rents could squeeze returns, especially with leverage elevated after recent transactions.
ME Group faces more commercial and regulatory risk: photobooth demand can be hit by rule changes, such as tighter German passport photo regulations. Plus, its growth plan assumes continued roll-out of laundry sites and new products.
My verdict
For those aiming mainly for reliability, Primary’s long dividend track record and government-backed leases make it more defensive. Just keep in mind that high payout ratio and debt load.
ME Group has stronger profitability with a lower valuation and payout ratio. That gives it more growth potential but only for investors happy to accept some operational and regulatory uncertainty.
In my opinion, both are worth considering: Primary as the steadier income anchor, and ME as the higher-growth complement.
This highlights a key aspect of diversification: a mix of dependability and risk can actually help stabilise income when markets get rough.
Should you invest £5,000 in Primary Health Properties Plc right now?
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Mark Hartley owns shares in Primary Health Properties.
