Let’s look at a couple, one of which reported to the market this morning.

Cheap dividend stock

I think self-styled “purpose-led global financial technology business“ IG Group (LSE: IGG) is a great way of tackling inflation. The online trading provider has actually been a core holding in my own Stock and Shares ISA for quite a while, partly due to the cash it keeps churning out. And based on today’s half-year results, I have no concerns about this trend continuing.

This morning, IG announced a record first-half performance. Net trading revenue increased 16% to £471.9m over the six months to the end of November. Pre-tax profit also rose 8% to £245.2m. That’s pretty impressive stuff considering that markets were fairly stable over the period (IG makes money when traders try to capitalise on volatility).

As encouraging as all this is, it’s the dividends I’m after. Today, the FTSE 250 member elected to keep its interim payout steady at 12.96p per share. Assuming the full-year cash return stays at 43.2p, that means IG yields 4.9% — eight times what the best Cash ISA will give me.

Will this be sufficient to beat inflation? I don’t know. But it’s definitely worth the extra risk that comes with investing, in my opinion. This is especially true given how much (or how little) buyers are being asked to pay to acquire this quality stock.

At yesterday’s close, IG shares traded at just 11 times earnings. While the threat of further industry regulation may go some way to explaining this valuation (and dividends are never guaranteed), I’d have no issue buying more. 

Another option

Of course, IG isn’t the only cheap dividend stock out there. Shares in Polar Capital Holdings (LSE: POLR) also grab my attention.

The fund manager’s price has tumbled 19% in 2022 to date as investors have become increasingly skittish. As far as I can see, it’s nothing to do with Polar itself.

To be frank, none of this should really bother me if I’m looking to generate passive income and/or beat inflation. Analysts believe Polar will return 42.4p to investors in the current financial year. At today’s share price, that becomes a monster yield of 6.6%. 

Too good to be true? Well, the recent volatility in markets will likely mean that the mid-cap’s next set of numbers may not impress. Asset managers typically don’t do very well when clients are clamouring to withdraw their cash. 

Still, the extent to which dividends will be covered by expected profits (1.4 times) looks reasonable. Polar is not one to slash its payout anyway. Based on its track record over recent years, the company is more likely to maintain rather than reduce cash returns when times get tough.

Also changing hands for 11 times earnings, I’d be happy to add Polar Capital to my ISA today.

The post Forget the Cash ISA. I’d buy these cheap dividend stocks today! appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group. The Motley Fool UK has recommended Polar Capital Holdings. 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. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The ultimate form of passive income

Passive income from investing takes the form of dividends — a proportion of profits paid out to owners (usually twice a year) for holding shares in a company. What effort does this require on my part? Absolutely none, aside from the initial purchase. Zip. Nada. Compared to becoming a landlord or starting a side hustle on eBay, it has arguably the best trade-off between effort and reward going. 

Obviously, there’s some effort involved. To get started with investing, I first need to find ways of cutting down my monthly expenses to free up some money. On top of this, it’s also vital to buy everything inside a Stocks and Shares ISA. This protects all of the passive income I receive from the taxman. 

Of course, I also need to select which stocks to buy. Thankfully, there’s never been a shortage of these. 

Stocks that pay me

For years, I’ve owned shares in online trading firm IG Group. This company makes its money by charging fees to clients that aim to profit from the stocks market’s inevitable ups and downs. As one might have guessed, business has been rather good lately. Right now, IG offers a yield of 5.5%. In sharp contrast, the top Cash ISA pays just 0.67%.

Another example is Somero Enterprises. It manufactures laser-guided equipment to ensure concrete surfaces in warehouses are as flat as a pancake. With retailers desperate for space to hold their products as online shopping explodes in popularity, I think this company is in something of a sweet spot.

Actually, I know it is! On Tuesday, the small-cap upgraded its full-year guidance following stellar trading in its largest market, North America. Most of that will have happened while I was asleep. At 6.3%, Somero yields even more than IG!

Of course, if I wanted to reduce my workload even more, I could ask a professional fund manager to pick stocks for me. That said, this strategy involves paying fees which ultimately reduces the amount of income I’d hang on to. There’s no guarantee a pro will do a better job either. 

Nothing is guaranteed

Naturally, there’s a caveat to all of this. Just as I can’t be assured a perfect night’s sleep, nor can I assume that the stocks I own will always be in a position to pay out. In tough times, dividends can be cut as firms attempt to shore up cash. 

I see two ways of mitigating this risk. First, own a bunch of passive income-paying stocks from different sectors. As an illustration of this, both IG Group and Somero are market leaders at what they do but operate in very different spaces. Throw in a few more stocks and this diversification should go some way to protecting me if one or two struggle. 

A slightly more involved step is to check the extent to which a company’s profits cover its dividend. Although earnings will naturally vary from year to year, this should ideally be two times. Anything lower than one and that passive income stream looks vulnerable. A consistently rising dividend is another indication of health. 

The post Passive income! How I make money while I sleep appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group and Somero Enterprises. The Motley Fool UK has recommended Somero Enterprises, Inc. 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.

Moreover, it doesn’t require having a whole lot of money to get started. In fact, I think an investor could build a portfolio of solid dividend-generating shares for just £100 a month.

Passive income winners

Assuming that money is within reach, the key is buying stocks that should, bar a ‘black swan’ event, continue paying dividends whatever the weather. Utility firms are a great example, hence my first pick is power provider National Grid. In charge of much of the UK’s energy-related infrastructure, it yields a chunky 5.1% right now.

Tritax Big Box shares look expensive. Nonetheless, the demand for the sort of warehouse space this real estate investment trust (REIT) owns should continue for many years to come. After all, the popularity of online shopping looks set to only increase. I’d therefore begin building a position with the intention of adding more in moments of general market malaise. The yield is 2.8%

Online trading firm IG Group remains one of my favourite listed companies. While the threat of increased regulation is never far away, the company’s bumper levels of free cash flow should ensure there’s no danger of the dividend being cut any time soon. It’s also a potential hedge if markets get volatile. IG yields 5.7% at the moment.

Boasting bursting lists of recognisable brands that shoppers tend to buy through habit, Britvic and Unilever shares — and their respective 2.7% and 3.7% yields — also get my votes. Both have near-perfect records of growing dividends over the years.

Here’s what I might get

Based on their forecast dividends at the time of writing (and assuming I invest equal amounts into each), the above five stocks generate an average yield of 4%. In other words, I’d get £4 in dividends for every £100 I invest. That’s an awful lot more than what I’d get from even the best Cash ISA on the block.

Are there ways of generating more passive income from UK stocks? Absolutely. However, one needs to question just how secure the payouts from cyclical companies involved in, say, banking, housebuilding and mining actually are.

Of course, there’s no guarantee that even the companies I’ve picked out will always be able to return cash to their owners. However, I have made sure to diversify across sectors. So even if one encounters a setback, the level of income should still be decent.

Patience required

Regardless of which stocks are selected, one thing worth highlighting is the time taken to generate a sizeable passive income stream. Initially, the money received will be negligible because the amount invested is small. That may not suit those with itchy trigger fingers and limited patience.

There are ways of speeding things up. Obviously, stashing more than £100 away every month is one option. Saving on fees by using a stockbroker’s regular investment scheme will also help.

If the income isn’t needed right now, an even better solution is to reinvest dividends. This boosts the accumulation of capital via compounding and could give me an even better passive income stream to draw on when I really want to put my feet up.

The post 5 passive income ideas for £100 a month appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group. The Motley Fool UK has recommended Britvic, Tritax Big Box REIT, and Unilever. 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.

Reliable payer

Last year aside, drinks giant Britvic (LSE: BVIC) has a great track record of regularly hiking its dividends. That makes it attractive at a time of rising prices, since my buying power should be maintained (and potentially increased).

Right now, analysts have the business returning 27.8p per share in FY22 — a stonking 18% increase on that expected for the financial year just completed. 

Using the current share price, this equates to a decent yield of 3.1%. Although buying single company stocks traditionally involves more risk, it’s worth noting this is far more than the 1.9% offered by the index.

Aside from its income credentials, Britvic strikes me as a defensive option, thanks to its bumper portfolio of brands. Returns on capital have also been consistently good. And, thanks to exporting to more than 100 countries, earnings are about as geographically diversified as I could want.

Of course, there’s a chance global supply chain issues and ongoing investment will hit sentiment in the short term. So we could see a bit of selling pressure (and potentially a great opportunity to buy) when full-year results arrive on 24 November.

Meaty hiker

I doubt meat supplier Cranswick (LSE: CWK) hits many income investors’ radars. That’s understandable. A forecast yield of 2% doesn’t grab the attention quite like one offering fives times this amount does. However, I think this qualifies as a stellar dividend stock.

The fact is that CWK is an excellent source of rising cash returns with an average growth rate of over 13% per year. That’s impressive, considering capital expenditure in this (low margin) industry can often be pretty hefty.

In addition to its rising dividend stream, Cranswick has also delivered solid capital growth. Holders would have seen a 55% gain since October 2016. That’s better than the 32% achieved by the FTSE 250 index. Clearly, this margin will have been even greater had those dividends been re-invested. 

Since I doubt whether many people are prepared to give up their sausages and bacon any time soon, CWK should go on rewarding investors long into the future.

Volatility hedge

A final FTSE 250 dividend stock I’d feel comfortable buying today is one I’ve already held for a number of years. That’s online trading platform provider IG Group (LSE: IGG).

Now IGG may not be every investor’s cup of tea for a few reasons. For one, the industry in which it operates is always susceptible to regulatory scrutiny. It’s also fair to say that IG faces significant competition for clients. That’s despite it being the recognised market leader in the UK. 

As credible as these concerns are, I continue to regard this stock as a potentially great hedge against market volatility. When emotions run high (as they did last year), trading activity increases and IG benefits. That’s good news for revenues, profits and, ultimately, dividends.

Currently yielding a forecast 5.4% for the current year, analysts have predicted a 10% uplift to IG’s total payout in FY23. With free cash flow looking very healthy and a US market ready to tap, I don’t see this as unrealistic.

The post 3 FTSE 250 dividend stocks to buy and hold for years appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group. The Motley Fool UK has recommended Britvic. 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.

Subdued market

Today’s statement started well enough. Having made the most of the last financial year, CMC said that client assets under management (AuM) continued to hit “near-record levels“. The number of active clients had also remained fairly consistent over the five months to the end of August and was up “around a third” from before the whole coronavirus crisis kicked off.  

However, it was at this point that the tone shifted. According to CMC, “subdued” market activity during July and August has meant lower trading by new and existing clients. Having attracted so many people to its platform over the last year or so, CMC also reported that client income retention has been “moderately below” its 80% target.

If the recent lack of activity continues, it believes net operating income for FY22 will now come in somewhere between £250m and £280m.  

Clearly, news like this (as well as an indication that operating costs were increasing) was never going to be greeted enthusiastically by the company’s investors. But is a 25% fall truly justified? 

Has the CMC Markets share price fallen too far?

Personally, I think the fall is overdone. Having benefited so much from the incredible volatility seen in markets last year, there was always going to come a time when trading moderated. Let’s not forget that, before today, the CMC Markets share price had increased 35% in just 12 months. Nothing rises in a straight line. 

There’s also a lot still to like about this company, at least in my view. It appears to have a sound strategy for growth and an incredibly robust balance sheet. The returns on capital metric beloved of UK star fund manager Terry Smith has been high for many years. A potential 16.9p per share dividend also has this stock yielding a chunky 5.5% at its new, much lower price. Now, no income stream can be guaranteed. Even so, this does strike me as adequate compensation for what could be rough times ahead.  

On the downside, the small ‘free float’ means the share price is potentially far more volatile than that of other stocks. Today would appear to be clear evidence of that! Second, the threat of increased regulation in this industry can never be discounted. Third, there’s no shortage of competition for clients. 

Letting it settle

I’d need to be very careful before adding CMC Markets to my portfolio. After all, I already own shares in the market leader IG Group. Having too much exposure to one industry invites trouble. It can be wonderful during the good times but a potential nightmare during the bad.

That said, if I didn’t own IGG, I’d be tempted to get involved with CMC at some point. This FTSE 250 member presents as a quality operator, albeit one that has become a victim of the sudden swing in Mr Market’s mood.  

Quite where the share price goes in the near term, however, is anyone’s guess. In recent weeks, we’ve seen several previously-loved stocks tumble and continue tumbling. Avon Protection and Best of the Best spring to mind.

If I did cave in and buy, I’d wait for the dust to settle first.

The post Here’s why the CMC Markets share price (CMCX) has crashed 25% today appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group. The Motley Fool UK has recommended Avon Protection. 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.

Record trading

Online trading provider IG Group (LSE: IGG) has been throwing dividends at my own portfolio for years now. Today’s record full-year results suggest this income stream will continue (and then some). 

As one might expect, the hugely volatile markets over the last year have attracted more people to trade via IG’s platform. The number of new and active clients jumped 39% and 31% respectively. As a result, net trading revenue rose 31% to £853.4m over the 12 months to the end of March. Pre-tax profit also rocketed 52% to a little over £450m.

And the dividends? Today, IG announced that it would be returning a total payout of 43.2p per share to holders. At the current share price rise, that’s a chunky yield of 5%. Based on the firm’s outlook, I’m increasingly confident this will rise in the future.

CEO June Felix believes the company is now in “a better position than ever before” and I’m minded to agree. Having exceeded its own expectations, IG said that it would now be issuing new strategic targets. Predicted revenue growth from its ‘Core Markets+’ was increased to 5-7% per annum over the medium term. In its ‘High Potential Markets’ division (which now includes the lucrative US options and futures market), it’s looking for 25-30% per annum.

Income and growth. That sounds pretty good to me!

Big dividends

Another of the best dividend stocks from the FTSE 250, in my opinion, is self-storage firm Big Yellow Group (LSE: BYG). 

In today’s update, the company said that occupancy growth over the three months to the end of June had been “significantly ahead” of that seen over the same period in 2020. Total revenue rose 15.1% to £36.6m.

A good proportion of this demand can be attributed to the tapering off of the stamp duty holiday and home movers looking to temporarily store their possessions. A lot of students were also wanting to use the company’s sites.

Like-for-like occupancy now stands at 91%. As such, I think it’s fair to say that there’s no danger of the UK becoming a nation of minimalists just yet. As one might expect, Big Yellow is capitalising on this. It’s continuing to acquire and open new sites around the UK.

Ultimately, this should be good news for dividend hunters. While the firm doesn’t pay out as much as IG at only 2.6%, the relatively defensive and simple business model makes me think dividends will continue steadily increasing.

No guarantees

All that said, it must be remembered that dividends are based on trading. And trading can never be taken for granted. IG Group could (and probably will) struggle to repeat its recent performance if markets settle. Big Yellow already expects to return to “normal seasonal trading patterns” later in the year. Add in the obligatory Covid-19 uncertainty and a smooth ride is far from guaranteed.

Based on these updates and the risk/reward trade-off, however, I still consider these to be two of the best dividend stocks in the FTSE 250. I’d feel comfortable buying either today. 

The post 2 of the best dividend stocks to buy from the FTSE 250 appeared first on The Twelfth Magpie.

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Paul Summers owns shares in IG Group. 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.

IG Group

Online trading platform IG Group (LSE: IGG) has been a huge beneficiary of the recent volatility seen in global stock markets. Since hitting a low of 563p back in March 2020, its share price has climbed 54% as traders have sought to capitalise on the big swing in sentiment.

After such a strong run, it’s rational to question whether this momentum will last for much longer. Even so, I believe the dividends on offer make IGG worthy of attention. 

The FTSE 250-listed company is likely to confirm a full-year dividend of 43.2p per share when it reports full-year results next month. At today’s share price, that gives a yield of 5% exactly. While investing in IG naturally involves more risk, that’s a world away from the paltry interest rate offered by even the best instant access Cash ISA.

On top of this, strong free cash flow also gives me hope that, after a few years of being cautiously maintained, investors could see payouts increase from here.

Central Asia Metals

Another company offering a 5% yield is copper miner Central Asia Metals (LSE: CAML). Like IG Group, the mid-cap has done well for investors over the last year. In fact, anyone who picked up the stock in June 2020 would now be sitting on a gain of around 80%! 

Of course, investing in the commodity markets isn’t for ‘widows or orphans’. The rise and fall of the gold price last year is one example of this. With this in mind, I wouldn’t hesitate to spread my money around other British dividend stocks in a variety of sectors. Having a suitably diversified income portfolio would allow me to sleep at night.

On a positive note, I see CAML’s payouts are likely to be covered more than twice by profits. This makes it very unlikely (but, naturally, not impossible) that those invested won’t receive their prized dividends. Couple this with the expected huge demand for the red metal over the next decade and I suspect CAML will be worth tucking away for a while. 

Target Healthcare

A final British dividend stock offering a chunky income stream is Target Healthcare (LSE: THRL). This real estate investment trust (REIT) owns a growing portfolio of care UK homes. 

Right now, the consensus among analysts is that the company will return 6.71p per share for FY21. That becomes a yield of 5.8% at the current share price.

As tempting as that dividend stream is, it’s important to remember that even the most predictable businesses can encounter crises. I probably don’t need to remind you of the awful impact of the coronavirus pandemic on Target’s industry last year.

Nevertheless, I think the investment case remains solid. Back in 2018, it was estimated that the number of people over 85 in the UK requiring care would double within 20 years. This should lead to higher demand for homes like those owned by Target. Such a development might prove even more lucrative if it’s able to capture a greater share of this fragmented market in the meantime.

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Paul Summers owns shares of IG Group Holdings. 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.

FTSE 250 dividend stock

As one might expect, coronavirus-related restrictions in the run-up to Christmas, coupled with the third UK lockdown soon after, heaped more pressure on the hospitality sector. Understandably, this has impacted Britvic — the owner of soft drink brands such as Robinsons, J20 and R Whites.

Total revenue for Q1 of its financial year was a touch over £328m. On a reported basis, that’s a fall of 9.8%. In its GB market, total revenue fell 4.1% thanks to a huge 32% tumble in ‘out-of-home’ sales. Overseas revenue fell more than 19%, although sales in Brazil were a bright spot, rising almost 26%. 

Naturally, the outlook for this FTSE 250 member’s profits is as cloudy as it is for most businesses. Today, Britvic said that it expects restrictions to stay during Q2 and that performance would continue to be “significantly affected“.

Not that CEO Simon Litherland seems too concerned. Commenting today, he said that Britvic is confident that it will “continue to successfully navigate the pandemic, emerge stronger, and be at the forefront of the recovery when it comes”. 

Time will tell. In the meantime, analysts have Britvic returning 26.3p per share to shareholders in FY21. Taking today’s 4% tumble in the share price into account, that equates to a forecast yield of 3.6%. For an established company in the resilient beverage sector, that really helps to mitigate the risk, in my opinion.

What’s more, Britvic’s shares still look reasonably priced at 15 times earnings before markets opened. Although capital gains are not the point for me when I’m looking to generate income, I think we could see the stock fizz when pubs, bars and cafes are allowed to reopen. 

Chunky cash returns

Another FTSE 250 stock offering a great source of dividends, in my opinion, is online trading platform IG Group (LSE: IGG).

A little over one week ago, it released a set of record-breaking H1 numbers to the market. Thanks to existing and new clients being so active, net trading revenue increased 67% to almost £417m. Pre-tax profit jumped 129% to £231.3m. 

In addition to these figures, IG also announced its proposed acquisition of US site tastytrade. This will give the £3bn cap a route into the fast-growing market of exchange-traded options and futures. It will also further diversify the company’s earnings by geography.   

Naturally, all investment involves risk and IG is no exception. While the shares have been riding a wave of positive momentum following the Covid-19 pandemic, there will come a time when clients become less active. The possibility of even more regulation of its industry can’t be dismissed either.

Even so, the dividends alone give me a reason to stay invested.  Assuming there’s no change to its 43.2p per share payout in this financial year, IG yields 5.8% at its current share price. That’s a lot more than I’d get from even the best Cash ISA.

Like Britvic, IG’s valuation is also inviting. A P/E of 12 looks cheap to me for a market leader generating high margins and returns on the money it invests.

The post With £2,000 to invest in FTSE 250 dividend shares, here’s what I’d buy appeared first on The Twelfth Magpie.

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Paul Summers owns shares of IG Group Holdings. The Motley Fool UK has recommended Britvic. 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.

The good news is that there are still many bargain dividend payers around. Here are three from the FTSE 250 that I’d buy right now if passive income were my goal.

Passive income powerhouse

Yesterday’s brief trading update from online trading platform provider IG Group (LSE: IGG) was well received by the market and it’s not hard to see why. 

Thanks to traders remaining active, IG now believes net trading revenue for the first six months of FY21 will come in at around £416m. That’s a stonking increase of 67% compared to the same period in the previous year. 

Naturally, there will come a time when the market becomes less volatile and IG’s trading volumes normalise. Even so, I still think the shares are worth grabbing for the dividends on offer. Another 43.2p per share return in this financial year gives a yield of 5.1% at the current share price. That’s far better than the ridiculously low 0.6% offered by the best instant access Cash ISA

What’s more, IG’s shares still trade on just 14 times expected earnings. I think that’s got to be a steal for such a high-quality, industry-leading firm.

Sweet yield

Ingredients supplier Tate & Lyle (LSE: TATE) is another FTSE 250 member offering a juicy passive income stream right now. 

Last month, the company revealed some better-than-expected numbers from the six months of trading to the end of September. These included a 1% and 9% rise in revenue and profit respectively at its Food & Beverage Solutions division. Its other business — Primary Products — “delivered steady earnings despite a significant reduction in out-of-home consumption in North America”. 

Like IG, shares in Tate don’t look particularly expensive. A price-to-earnings (P/E) ratio of 12 for the current financial year looks very fair to me, even if the company is still cautious about trading going forward.  

And the dividends? A possible 30p per share cash return gives a yield of 4.5% at the current share price. What’s more, this payout is expected to be covered 1.8 times by profits, suggesting it’s unlikely to be cut any time soon.

Drink in those dividends

A final stock from the FTSE 250 that I think should continue generating passive income for holders is soft drinks giant Britvic (LSE: BVIC).

Last month’s results for the year to the end of September were adequate enough given the impact of the pandemic. Although revenue fell 6.8% to £1.41m, post-tax profit rose almost 17% to £94.6m. The company also highlighted that it has extended its UK bottling deal with PepsiCo for another 20 years.

Most importantly for passive income seekers, Britvic confirmed a 21.6p dividend for the full year. This gives it a trailing yield of 2.7%.

Given that the soft drinks industry tends to bounce back strongly after setbacks, I see no reason why this company won’t increase its cash returns to holders. Indeed, if analysts are correct, the company could return 26.9p per share return in the new financial year. That gives a yield of 3.3%!

Trading on 15 times earnings, Britvic remains another highly tempting dividend pick, in my view. I’d buy.

The post I’d spend £3k right now on these cheap FTSE 250 dividend stocks for passive income appeared first on The Twelfth Magpie.

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Paul Summers owns shares of IG Group Holdings. The Motley Fool UK has recommended Britvic. 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.

Market crash winner

Last week’s Q1 revenue update from online trading provider and FTSE 250 member IG Group (LSE: IGG) was short but definitely sweet for those already invested. 

Great value

With its counter-cyclical attributes, insolvency firm Begbies Traynor (LSE: BEG) is another stock to hold during tough economic times. Like IG, it also reported to the market last week.

In a statement delivered at its AGM, Executive Chairman Ric Traynor said that the number of new appointments taken on by the company had been “encouraging” and had helped increase its share of the market. Despite being disrupted by the coronavirus, the £120m cap’s property advisory and transactional services business had also managed a “solid financial performance”. Activity levels here are recovering faster than predicted.

Begbies will report its latest set of half-year numbers in December. Since insolvency levels could rise substantially between now and then as the government’s financial support for businesses ends, I think the shares look good value at 15 times forecast earnings.

The investment case becomes even stronger when you consider the dividends on offer. A predicted 3p per share payout in the current financial year translates to a yield of 3.3%.

Targeting income

A final income pick for nervous times is real estate investment trust Target Healthcare (LSE: THRL). It invests in, and rents out, modern care homes. This arguably makes it one of the most defensive businesses you’re ever likely to find on the market.

As evidence of this, Target reported collecting 96% of rent payable for the last quarter back in July. Another positive was that only five of its 71 homes (representing 15 of 4,925 beds) were reporting cases of Covid-19 at the time.

As a REIT, Target is required to return a big proportion of income to its shareholders. In FY21, this will likely be around 6.76p per share. Based on its closing price on Friday, that gives a yield of 6.2%.

When it comes to generating passive income with limited risk, it surely doesn’t get much better than this. Market crash or not, Target presents as a great dividend pick, I feel. Full-year results are due any day.

The post Want passive income if markets crash again? I think these are the best shares to buy now! appeared first on The Twelfth Magpie.

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Paul Summers owns shares of IG Group Holdings. 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.