Today, I’m going to take a look at three of these high-yield champions and explain why I think they’re great at current prices.

High risk 

My first high-yield FTSE 250 pick is Ukrainian iron ore miner Ferrexpo (LSE: FXPO). This isn’t one for the faint-hearted. It’s currently without a CEO after Kostyantin Zhevago stepped aside to resolve issues at one of his other firms earlier this week. The company has also been hit by corruption allegations and corporate governance concerns. 

Still, despite these issues, Ferrexpo’s underlying business is throwing off cash. Between 2016 and 2018, the group reported free cash flow from operations of $690m. Of this, $150m was paid out to investors via dividends, and $335m was used to pay down debt.

City analysts are expecting this trend to continue. They’re forecasting a net profit of $468m, implying the stock is currently dealing at a forward P/E of 2.1. Analysts also believe Ferrexpo will distribute around 30% of its earnings to investors with dividends, giving a yield of 13.6% on the current share price.

All in all, I think Ferrexpo’s low valuation and high dividend yield more than make up for the risks surrounding the business.

Property bargain 

Newriver REIT (LSE: NRR) is also a dirt-cheap FTSE 250 dividend bargain. With its extensive exposure to commercial property, investors have been giving Newriver a wide berth recently. However, despite these investor concerns, the business has managed to outperform expectations.

At the beginning of September, the group announced it had agreed £58m of property sales in its portfolio on terms 1.2% above book value, on average. 

This seems to suggest the market has oversold shares in Newriver. Indeed, at the time of writing, shares in the real estate investment trust are changing hands at a price to book value of 0.8. Recently-agreed property deals suggest the multiple should be closer to 1. These figures indicate the stock could rise by more than 20% from current levels when confidence returns to the commercial property market. 

As well as the capital growth potential, investors can also look forward to a dividend yield of 10.6%, provided by income from Newriver’s diversified commercial property portfolio.

Construction giant

My final FTSE 250 income play is construction group Galliford Try (LSE: GFRD). After five years of growth, Galliford’s earnings slumped in its 2019 financial year, following the collapse of its joint venture partner Carillion. 

The costs of this collapse have forced the company to restructure itself and reconsider how much money is paid out to shareholders every year. The dividend was cut in 2018 and reduced further in 2019.

City analysts believe Galliford’s earnings will decline further in its current financial year, but growth is expected to return in fiscal 2021. Analysts are also forecasting a dividend increase, although I’m not so optimistic on this front. I would rather see management take a conservative line and prioritise balance sheet strength over shareholder payouts. 

Still, at current levels, the dividend yield is highly attractive. The stock supports a yield of 7.8%, and the distribution is covered twice by earnings per share. 

The post Looking for income? I’d buy these FTSE 250 dividend stocks yielding 10% appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

On top of this market-leading dividend yield, shares in the business also look dirt cheap. The stock is currently dealing at a forward P/E of just 9 and a price-to-book ratio of 0.7. 

These metrics look highly attractive, but does NewRiver deserve this low valuation? Today I’m going to try to find out. 

Poor outlook 

Shares in NewRiver have taken a hammering over the past 12 months. With its portfolio of 50 retail parks and shopping centres, the company has quite a lot of exposure to the struggling retail sector. It’s clear that investors don’t want too much exposure to this unfavourable asset class. 

However, despite these concerns, NewRiver seems to be coping well in the environment. At the beginning of September, the firm announced that asset sales were going to plan. So far in fiscal 2020, disposals of £57.9m have been agreed at a blended initial yield of 5.4% on terms “1.2% above book value.“

Completed disposals comprise a food store and petrol filling station, one shopping centre, seven convenience stores as well as a handful of the company’s pubs and some surplus land. 

These metrics seem to suggest that the market’s view of the company is too pessimistic.

Indeed, the stock’s current valuation suggests that investors believe the company’s property is worth less than management is reporting. But based on recent sales, that just does seem to be the case. NewRiver is selling assets above book value on average. On this basis, I think the stock is undervalued and should be worth at least tangible book value. 

Recycling 

As well as selling off non-core assets, NewRiver is expanding its portfolio, using its scale and skill to sign advantageous deals in the current market.

Today, the firm announced that its joint venture with BRAVO Strategies III LLC has acquired Poole Retail Park in Dorset for £44.7m. NewRiver will hold 10% of the joint venture as well as being appointed as asset manager, in return for a “management fee calculated with reference to the gross rental income of the asset.” Poole Retail Park has a net initial yield of 8%. 

Buying new assets when there’s so much uncertainty in the commercial property market might appear to be a silly strategy, but as I’ve highlighted above, NewRiver’s assets are weathering the storm really quite well. On top of this, the income received from managing the property will go straight to the bottom line. 

Conclusion 

Considering all of the above, I am interested in NewRiver at the current price. It appears to me as if the stock is trading at a discount to book value for no good reason and that 12% is too good to pass up. I’ll be adding this firm to my watchlist today. 

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However, while the returns available from buy-to-let property have been falling over the past decade, yields on real estate investment trusts have been rising. And right now, several trusts offer dividend yields of more than 8%!

Outside London

Regional REIT (LSE: RGL) was established with the aim of building an attractive commercial property portfolio in population centres across the UK outside of the M25 motorway. Over the past five years, it has more than doubled the value of its portfolio to nearly £500m through the issue of new shares and debt. 

It does not look as if the enterprise is going to slow down any time soon either. Regional’s focus on out-of-town business centres, warehouse facilities and offices has helped the company ride out the storm on the high street, and the demand for its properties is booming.

Back in June, the firm announced a series of lettings to new and existing tenants with an average rental uplift of 11.6%. Only a few weeks before this series of transactions was announced, Regional informed investors that it had agreed to sell a building in Sheffield 25% above its book valuation (as at December 2018). Today the company published a further positive trading update, informing investors that it has inked £1.3m of new lettings with a “major uplift” in income for the group. 

To capitalise on the opportunities available in regional property markets, last month it announced a £50m placing at a 7% discount to the market price to raise money for further deals.

When these new properties start to contribute to the bottom line, City analysts reckon Regional will have the ability to pay out 8.26p per share in dividends for 2019, giving a dividend yield of 8% at the current price. Based on its track record of creating value for shareholders, I think it’s worth snapping up this income champion today. 

Value opportunity 

If you’re looking for property income, I also highly recommend checking out NewRiver REIT (LSE: NRR). Shares in NewRiver have come under pressure over the past two years due to the company’s exposure to the retail property market.

The firm’s critics believe that the group’s 33 community shopping centres, and 23 “conveniently located” retail parks will suffer as consumers continue to move away from bricks-and-mortar shops, and, as a result, NewRiver will have to mark down the value of its assets and possibly cut its dividend.

I think it is unlikely NewRiver will cut its dividend. But, if it does, with a dividend yield of 14% at the time of writing, even a 50% cut would leave the company yielding a highly attractive 7%.

On top of this, the stock is trading a price-to-book value of just 60%. This implies the market believes its property portfolio is worth 40% less than NewRiver is saying it is. That might be the case, but I think the market is assuming the worst-case scenario. If the worst case never happens, this could be an excellent opportunity for savvy value investors.

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Rupert Hargreaves owns shares in Regional REIT. 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.

With this being the case, I highly recommend ditching cash and investing your money in dividend stocks instead. Here are three FTSE 250 dividend stocks I’ve got my eye on today.

Property income

NewRiver Reit (LSE: NRR) saw its shares crash to a five-year low last year as investors rushed to dump any investments with significant exposure to the UK high street.

As one of the largest publicly traded retail and leisure property investors in London, NewRiver has more exposure to retail bankruptcies than most, but despite its retail exposure, the company is holding up relatively well.

It has relatively limited exposure to the most significant failures, such as Debenhams. Its total exposure to the struggling department store is just 0.1% of its gross rent roll, meaning that the company’s collapse is likely to have a minimal impact on the firm.

In January, it reported occupancy of its retail portfolio of 95.5% and pub occupancy of 98.9% — robust metrics considering the state of the high street.

These occupancy figures, coupled with the company’s low level of gearing (35% loan to value) lead me to conclude that investors can rely on NewRiver’s 9.4% dividend yield.

Market leader

Another FTSE 250 high-yield stock that’s on my radar is Hastings Group (LSE: HSTG).

Hastings is taking on the UK’s car insurance market by using technology to deliver better outcomes. This approach has helped the firm increase profits from £41m to £128m over the past six years. Revenues have risen from £252m to £814m over the same period.

Despite this impressive growth, the stock recently dived after the firm warned that profits growth would slow this year as claims inflation has been outpacing insurance premium growth. Following the update, analysts are now forecasting flat earnings for 2019, which is disappointing, but I see these as temporary headwinds.

The whole UK car insurance industry is facing the same issues, and this should mean premiums start to grow over the next 12 months to reflect the higher level of claims. With that in mind, I reckon now could be an excellent time to snap up the shares at a historically low valuation of just 9.6 times forward earnings. The dividend yield of 7.3% looks pretty safe as well.

Consumer retail

My last FTSE 250 income pick is Dixons Carphone (LSE: DC). Another company that has fallen out of favour with investors recently, Dixons is still the first point of call for many shoppers looking for electricals on the high street.

Analysts have pencilled in a decline in earnings of 23% for 2019, the second straight year of declining profits. However, stability is projected to return next year, and I think this could be a catalyst for the stock. Moreover, the shares are changing hands at just 7.3 times forward earnings, 37% below the sector average, implying there’s a near 40% upside for investors when confidence returns.

In addition to capital growth, there’s also the 5% dividend on offer, although, with the payout now covered 2.8 times by earnings per share, I think there’s a good chance the yield could jump back to its historic level of 7% during the next year or two.

The post I’d ditch a Cash ISA and buy these 7%+ yielding FTSE 250 dividend stocks appeared first on The Twelfth Magpie.

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After Royal Mail told investors it expects operating profit for the year ending March 31 of between £500m and £530m, below management’s previous forecast of £500m to £550m and significantly below last year’s adjusted operating profit of £694m, the stock plunged nearly 15% in a single day. Following these losses, the stock is off more than 44%, excluding dividends, over the past 12 months.

I hate to say it but, unfortunately, I don’t think there’s a quick solution to Royal Mail’s problems, and there could be more declines ahead for investors.

Shrinking market

The way I see it, Royal Mail has two main problems. First of all, the number of letters being sent across the country is declining and that decline is only accelerating. Last week’s update informed investors that letter volumes are on track to decline by as much as 8% this financial year, above the company’s targeted range of 4-6%.

Second, Royal Mail must continue to provide a regular postal service to all households across the UK. So, they can only cut costs by a certain amount. 

Looking at these two factors, it seems to me as if the business is stuck between a rock and a hard place. Sales are falling, but the business cannot be as aggressive on costs as perhaps management would like to be.

An increase in the number of parcels being delivered, as well as Royal Mail’s international business, is helping to offset some of the declines, although as the recent update shows, growth here isn’t enough.

Considering all of the above, I think it could be time to sell the Royal Mail share price. The company is facing an uncertain future, and while a dividend yield of 9.5% might look attractive, falling profits don’t fill me with confidence that this distribution is sustainable.

Personally, I would rather invest my money in property than the Royal Mail share price, which is why I would buy shares in New River Retail (LSE: NRR) instead.

Avoiding the pain

Investors seem to be just as worried about New River’s future as they do about Royal Mail’s, and it is easy to see why. The company has a huge commercial property portfolio, leaving it exposed to the struggling UK high street. 

However, I’m not as pessimistic about New River’s outlook the rest of the market seems to be. Yes, the group does have significant exposure to retail property but, so far, the company seems to be coping quite well. 

In its third-quarter update, published a few weeks ago, New River revealed that its portfolio occupancy was 95.5% at the end of 2018. Some 119 leasing deals were signed during the quarter, with an average rent per square foot of £14.61, up from the previous figure of £13.14 per sq ft.

These figures tell me the company is outperforming in a tough market and, this being the case, I think it’s worth buying into New River’s highly attractive dividend yield, which currently stands at 9.3%. The stock is also trading at a discount of more than 20% to it published net asset value, providing a healthy margin of safety if asset values should suddenly slump. 

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Unfortunately, for companies like BP (LSE: BP) this scenario is now unlikely to play out as it seems that the oil bear market has returned. After President Trump voiced his support for a low oil price two weeks ago, the price of Brent crude has plunged, falling below $60/bbl, down more than $25/bbl in just two months.

Beating the market 

Amid the sell-off, shares in BP have remained relatively resilient, falling by around 13% since the beginning of October. I believe the reason why investors have not rushed to dump the stock is because over the past three years, the group has proven that it can weather low oil prices. The changes the company has made to its business model since 2014, should protect it against the market volatility.

That said, even the small decline in the share price has been enough to send the dividend yield up to 5.9%. The company’s total shareholder yield, which includes money distributed to investors via share buybacks, is just over 6%.

But is this yield worth buying or is retail investment trust Newriver REIT (LSE: NRR) a better investment for your portfolio?

Higher yield

The first thing that stands out about Newriver when compared to BP is the company’s yield. At the time of writing, the shares support a dividend yield of 9.6%. As a retail investment trust, Newriver is required to distribute 90% of its earnings from property to investors as a dividend to maintain its advantageous tax treatment. 

This requirement means the dividend can be volatile as the company is continuously paying out as much as it can afford. If income falls, so will the dividend. It seems the market is worried that the group, which owns a portfolio of leisure properties and shopping centres, will suffer from falling rents and bankruptcies. The dividend may be cut as a result. 

Some cracks are starting to show. Occupancy of the company’s retail property portfolio declined to 96.2% from 96.5% between March and September of this year. Pub occupancy dropped from 99% to 98.6%. Like-for-like footfall across the trust’s shopping centres declined by 1.9%, and like-for-like net income across the retail portfolio decreased by 0.5%.

Still, despite these negative data points, management increased the company’s dividend per share by 3% at the halfway point, although this is only “77% covered as our disciplined approach has meant capital is not yet fully deployed in anticipation of future acquisition opportunities.“

As well as the company’s extensive portfolio of retail property, I am also worried about Newriver’s concentrated exposure to the UK. Compared to BP, which has an empire spanning the globe, the business seems overly exposed to just one country.

The bottom line

Considering the above, I would buy BP over Newriver as an income investment. While I do like what Newriver has to offer, the 6% dividend yield from a global oil giant seems, in my opinion, to be the safer investment.

The post Is the BP share price a bargain or should I buy this 9.6% yielder? appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

You see, with inflation sitting just under 3%, an annual interest rate of 1% means the real rate of interest you are receiving is -2%. To put it another way, that cash ISA that seems so innocent is really costing you money.

With that in mind, here are two FTSE 250 stocks that I reckon offer a better investment proposition.

Established business

Pub group Greene King (LSE: GNK) was first incorporated in 1887, and today the group operates more than 3,000 pubs around the UK. Even though the pub industry is going through a tough time, Greene King is well positioned to weather the storm as one of the largest operators in the space. 

Unfortunately, while the company is well positioned in the market, headwinds are likely to weigh on growth for the next few years. City analysts expect earnings per share (EPS) to flatline for the rest of this decade.

Still, what Greene King lacks in growth, it more than makes up for in income. Right now the shares support a dividend yield of 6.7%, and the distribution is covered 1.9 times by EPS, which indicates to me that this payout is sustainable even with stagnating earnings. 

What’s more, the stock is cheap. It is currently trading at a multiple of just 7.8 times forward earnings, a near 50% discount to the rest of the market. This indicates that investors could benefit from both income and capital growth if sentiment towards the pub sector improves. If not, a dividend yield of nearly 7% is, in itself, difficult to ignore.

Bricks and mortar

If you’re not convinced by what Greene King has to offer, another company that I believe could be an excellent income investment is Newriver REIT (LSE: NRR).

Newriver is an interesting play on the UK commercial property market. The business has interests in shopping centres, retail warehouses and high street retail assets across the UK. It also owns a portfolio of pubs (although it does not manage them, unlike Greene King). These property assets produce a reliable stream of rent, topped up by income from property development activities. 

The firm recently added to its portfolio by acquiring Hawthorn Leisure, which boosted the percentage of pubs in its portfolio to 20%.

As a real estate investment trust, Newriver has to return the bulk of its income to investors. City analysts believe the company will return a total of 21.8p per share to investors for fiscal 2019, rising to 22.4p for 2020. These numbers indicate a prospective dividend yield of 8.5% for 2019 and 8.7% for 2020 based on the current share price. 

In comparison to the average cash ISA interest rate of just 1%, a yield of 8.5% is desirable and should not be overlooked in my view.

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The great thing about property stocks is that they are hands off. Managers do all the hard work of managing properties for you, and all you have to do is sit back and collect the income. 

Real estate investment trusts also offer diversification, and you can buy and sell the shares when you please. Take New River REIT (LSE: NRR) for example. This trust owns a broadly diversified portfolio of property assets located around the UK and 1.9m sq ft of new space under development. 

The elephant in the room here is New River’s exposure to the retail sector. Challenging retail conditions have sent the UK high street into a spin. CVAs — a process which allows retailers to cut rents and close unprofitable stores — have jumped 143% in 2018, while the number of insolvent retailers has hit over 3,200 since 2014. 

However, while rising numbers of CVAs might be bad news for landlords overall, I believe investors are overreacting when anticipating the impact on New River. 

Indeed, as they head for the door, investors have pushed shares in the retail REIT down to a five year low. The dividend yield has surged to 8%, and the shares now trade at a discount of 10% to book value. 

Adapting to changes 

According to the group’s first quarter trading update, it is coping well with the harsh retail environment. 96.2% of the overall portfolio is currently occupied, rising to 99% for the pub portfolio. 

Management is looking to unlock value from underperforming retail assets by converting properties into residential units. Following a strategic review, New River is now planning to develop “up to 1,300 residential units adjacent to or above our retail assets over the next 5-10 years.” This forward planning, coupled with the group’s already well-diversified portfolio and market-beating dividend yield, leads me to conclude that New River could be a great addition to your portfolio for the next decade.

My love of property plays isn’t just limited to REITs. I’m also interested in cash-rich developers such as Bovis Homes (LSE: BVS). 

Making shareholders rich

For the end of its 2017 financial year, Bovis reported a cash balance of £145m, just under 10% of its market cap. The City expects the group to distribute most of this money to investors over the next two years. A dividend per share of 102p is pencilled in for 2018, rising to 103p for 2019, equating to a dividend yield of 8.9% and 9% respectively. 

Based on the fact that last year’s total distribution of 48p per share only cost £60m, compared to Bovis’s free cash flow of £154m, I estimate 2018’s payout will cost approximately £125m. Once again, cash generated from operations should easily cover the total. 

Going forward, Bovis is well-placed to continue handing out cash to investors. The group is a leader in the construction of affordable homes, precisely the type of buildings the government wants to encourage. The firm’s expertise and dominant size in the sector means that it can achieve sector-leading profit margins of 12% (industry average is less than 10%) — it’s no surprise the enterprise has been subject to not one, but two takeover attempts in the past 12 months. 

All in all, another dividend stock that I believe deserves further research. 

The post Two 8%-plus FTSE 250 dividend yields I’d buy now and hold for 10 years appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

However, while these figures may look impressive at first glance when you dig into the numbers, they’re less exciting. 

On an adjusted basis, excluding any pre-tax charges, profit before tax for the year fell by £20m from £77m to £57m. Adjusted earnings before interest, tax, depreciation and amortisation fell to £95m from £121m and adjusted earnings per share declined 26% year-on-year from 30p to 22.3p. Like-for-like sales for the year ticked 3% lower. 

Overall, these numbers look pretty disappointing, but there are some bright spots in the report. For example, net bank debt fell to £22m from £28m, and the company generated free cash flow from operations of £85m, up from £79m last year. Even though profits are falling, this strong cash generation allowed management to maintain the group’s full-year dividend at 17.4p, indicating a dividend yield of 6.7% at current prices. 

What does the future hold? 

Looking at the figures above, I believe there’s no reason why the current dividend payout cannot be maintained. That being said, the outlook for the casual dining industry is bleak. Companies are struggling to deal with the triple threat of changing consumer tastes, rising costs and falling real incomes, and it’s estimated that one in three of the top 100 restaurant groups in the UK is now unprofitable.

Restaurant Group, which owns dining chain Frankie & Benny’s, is not immune from these pressures. The group has already undergone an aggressive restructuring and management is targeting a further £10m of cost cuts over the next year. 

Despite these measures to cut costs, I believe that it’s going to be some time before growth returns, considering the pressures impacting the broader food industry. With this being the case, even Restaurant’s market-beating dividend yield and valuation of just 11.1 times forward earnings is not enough to convince me to buy the shares.

One 7.5% yielder I am positive on, however, is NewRiver REIT (LSE: NRR). This real estate investment trust owns a portfolio of approximately 30 shopping centres, 20 retail warehouses and 360 pubs, giving it a diversified income stream with over 2000 occupiers.

The sector’s best buy? 

Recently, shares in NewRiver have come under pressure due to concerns about the rising number of insolvencies in the retail sector and the impact this is having on landlords. But while some landlords might be feeling the heat, NewRiver is not. 

At the end of January, the company reported that like-for-like footfall was up over the quarter by 0.5% and 1.9% during December “significantly outperforming the national benchmark.” Meanwhile, group occupancy was a record 97% at the end of the period.

These figures give me confidence that NewRiver can continue to outperform its peer group and maintain the high single-digit dividend yield. A low loan-to-value ratio of only 25% also means that the firm has plenty of headroom on the balance sheet to fund the expansion of its property portfolio as well, hinting that the dividend payout could expand further in the years ahead. 

The post Why I’d sell this turnaround stock to buy this unloved 7.5% yielder appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

But if it’s bigger dividends you’re after, you should be able to beat the FTSE — and using investment trusts, which can even out income as dividends over the longer term, is an approach I’ve always liked.

If you also want a position in the UK’s booming commercial property sector but don’t have enough cash to buy your own factory or shopping centre, a real estate investment trust (REIT) is, in my opinion, the best option there is.

Retail property growth

I like the look of NewRiver REIT (LSE: NRR), and I was pleased to see its shares put on 5.5% this morning, to 316p, after the company gave us a third-quarter update.

NewRiver invests in shopping centres, retail parks, high street properties and leisure facilities, and chairman Paul Roy told us its portfolio is “performing well and significantly outperforming the wider UK retail market.”

Occupancy rates of a record 97% were impressive, and the company’s focus on affordable rents (with an average retail rent of £12.70 per square foot) should help it keep up its growth. The discount retail sector is apparently expected to grow by 36% over the next five years.

Footfall in the quarter rose by 0.5% over the same period last year, and December’s footfall gained 1.9%. The latter was ahead of the UK benchmark, and supports suggestions that shoppers are being more careful with their pennies these days.

This all brings us to what I see as NewRiver’s big attraction, which is its dividend. As earnings have been growing strongly since 2014, so have the dividends been boosted. The year to March 2018 is forecast to provide a yield of 6.6%, with rises to 7% by 2020 on the cards.

And if that’s not a good enough reason to buy the shares, I don’t know what is.

Another favourite

I’ve had my eye on Intu Properties for a while, and it was with mixed feelings that I learned of an agreed all-share offer from Hammerson (LSE: HMSO) to merge the entire share capital. Intu, after all, was set to deliver a full-year dividend of 6%, with more of the same forecast for the next two years.

But thinking more about it, I see the two as a good match, bringing together a portfolio of retail and leisure properties with a value of around £21bn. The combined reach encompasses the UK and European markets, and the enlarged Hammerson will be a key player.

The Hammerson share price has pretty much stagnated over the past five years, standing at 500p today for a mere 5% rise.

But earnings have been growing over that period, and dividends have been rising steadily. From a 19.1p per share payout in 2013 which yielded 3.8%, the year ended 31 December 2017 is expected to provide 25.5p for a 4.9% yield, with boosts to 5.4% by 2019 currently being suggested.

This will all change when the merger progresses, and new forecasts will reflect the totality of the existing two businesses. But with Intu’s dividend prospects looking slightly better than Hammerson’s, I don’t expect any significant change in the forecast yield for the combined operation.

The post 2 dividend investment trusts with yields that beat the FTSE 100 appeared first on The Twelfth Magpie.

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Alan Oscroft 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.