3 no-brainer FTSE 250 dividend stocks to buy today – Motley Fool UK

Investors typically turn to the FTSE 100 when looking for long-term income investments. I think the FTSE 250 has plenty to offer too.
Image source: Getty Images
The FTSE 250 is generally best known as an index for seeking growth stocks. But I reckon those who ignore its potential for generating cash could be missing some very tasty opportunities.
Right now, I’m seeing some very attractive dividend yields, which I think look like definite long-term buys. But what do I mean by “no-brainer”?
I’m thinking about shares in business that tend to suffer in economic downturns, like we’re in right now. But they’re in industries that have a track record of bouncing back when things improve.
In tough times when stock markets are weak and investors are scared, investment managers will inevitably suffer.
That’s exactly what’s happened at Jupiter Fund Management (LSE: JUP). The firm has seen an outflow of funds, and poor performances in some of its holdings. Taken together, that doesn’t look good. And the Jupiter share price has slumped.
The forecast dividend yield has shot up above 10% now. To sound a caution, I wouldn’t be surprised if it’s cut. And we could be in for a further shaky spell for Jupiter shares.
But every stock market downturn I’ve ever seen has been followed by a recovery. And those who manage investments for their customers tend to do well when that happens.
Inflationary pressures have hit insurers, particularly specialist ones. And that’s sent the Direct Line Insurance (LSE: DLG) share price plunging.
But it’s also pushed the forecast dividend yield up, again to more than 10%. Will there be a dividend cut? I think the possibility is quite high. Still, investors in the insurance business should expect this, shouldn’t they? I mean, they pay out when times are tough, and they suffer price competition when inflation is high.
So if I invest in insurance, I do so for the long term, with enough time to cover the ups and the downs. And when there’s a downturn? Well, I disagree with those who think it’s time to sell.
I expect tough times for the insurance sector for a while yet. But over the decades, it’s a highly cash-generative business. And I’d buy when it’s down, for better long-term dividend yields.
My simple, no-brainer, thinking about the housebuilding industry goes something like this… We’re suffering a chronic housing shortage in the UK, which is almost certain to be with us for a long time yet. So it’s surely a good business to invest in, isn’t it?
And after this year’s price falls, Bellway (LSE: BWY) has to be a good stock to buy now, right?
Does it need to be any more complicated than that? The City seems to think so. The predicted dividend yield is now above 6%. Will it be cut? I don’t know, but it might. And the whole business might face gloom and despondency in the next couple of years.
But again, the strategy of investing in dividend stocks with long-term strength when they’re in a short-term downturn seems obvious to me.
With all of these, I think investors should be prepared to suffer some short-term pain. But what does that matter to those with decades-long investing horizons?

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 considered so you should consider taking independent financial advice.
Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Jupiter Fund Management. 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.
| Dr. James Fox
GSK shares had a bad time last week. They’re down 15% as investors’ sentiment soured ahead of litigation proceedings in…
Read more »
| Kevin Godbold
Asset bubbles keep on coming, and here’s what I’m doing to navigate through them and invest for the stock market…
Read more »
| Harshil Patel
UK shares can offer a lucrative path for passive income. Our writer considers a plan to double his State Pension.
Read more »
| Kevin Godbold
I reckon the best shares to buy now have strong growth in earnings and recent good news flow, such as…
Read more »
| Kevin Godbold
Here’s my three-step plan for achieving a growing income from dividend stocks and three companies I’d use to help execute…
Read more »
| Ben McPoland
Many British shares are trading cheaply and pay dividends. This is normally the hunting ground for Warren Buffett, yet he’s…
Read more »
| Stephen Wright
Finding the right opportunities can bring spectacular results. Here’s how our author has managed to increase his monthly passive income…
Read more »
| Christopher Ruane
Our writer is considering buying lithium shares for his Stocks and Shares ISA. Here, he outlines the decision process he…
Read more »
View All
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 considered so you should consider taking independent financial advice.
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >

We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FRN: 422737). In this capacity we are permitted to act as a credit-broker, not a lender, for consumer credit products. We may also publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners. We do not provide personal advice and we will not arrange any products on your behalf. Should you require personal advice, you should speak to an independent, qualified financial adviser.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2022 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.


Leave a Comment