2 FTSE 250 income icons yielding above 6% that could pay me cash for life

Jon Smith runs through two different FTSE 250 income shares that have both paid continuous dividends for at least the past decade.

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In my view, the best place to try and find dividend shares is in the FTSE 250. It’s the perfect balance of companies that are large enough to have a good track record, but not too mature that means the dividend yield isn’t exciting enough. Here are two ideas that I have on my watchlist going into the autumn.

New name, same story

First is Zigup (LSE:ZIG). If you think that name doesn’t sound familiar, it’s because it’s a recent rebrand and name change of Redde Northgate. The business operations remain exactly the same, namely offering mobility solutions to business and personal customers. It has 130,000 owned and leased vehicles.

Over the past year, the stock has risen by 17%. Even with the share price rally, the dividend yield is still at an impressive 6.67%. Normally, if the dividend per share stays the same but the share price goes up, the dividend yield falls.

But for Zigup, the dividend per share has been rising fast. It has paid out dividends in some form for over a decade without any let-up. The total figure from the past year was 25.8p, up from the 24p in 2023 and the 21p in 2022. There’s a clear trend higher, and this is being supported by improved financial results.

Revenue has increased each year for the past five years. In comparison to the £779m from 2020, the latest year saw it hit £1.83bn. This highlights the growth in demand, even as the firm opens more locations. As such, I don’t see future dividends under any threat.

One risk is that the business is reliant on the success of the transportation and automotive sectors. If companies experience a slowdown in demand, this is going to feed through to less usage of the vehicles.

Volatility is a friend

A second stock I like is TP ICAP (LSE:TCAP). In a similar way to Zigup, the share price has rallied hard over the past year, up 46%. Yet the dividend yield still remains at an attractive 6.17%.

I refer to the firm as an income icon because it has constantly paid out a dividend for over two decades. This includes during the financial crisis in 2008/09 and the pandemic from 2020/21. In fact, ICAP wasn’t hampered as much as some other businesses during the pandemic, as the volatility from financial markets was good for revenue.

This is because ICAP is a financial broker, effectively acting as a middle-man between banks or other institutions that need to trade. This could be for an unusual financial product, or because the buyer or seller wants to remain private. Either way, the more volatile the market is, the more trades happen, banking more commission for ICAP.

Looking ahead, we have the key US Federal Reserve meeting next week, along with the upcoming Presidential election. There are plenty of other events that could move the markets, helping ICAP. However, one risk is the currency hit it’s taking due to the stronger British pound. Around 60% of revenue is made in US dollars ,which need to be converted to pounds. So the strong pound isn’t helping!

I like both stocks and would consider buying when I have free cash.

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.

Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Tp Icap Group Plc. 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.

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