I say avoid the stress of FTSE 100 dividend cuts with these FTSE 250 income stocks

Royston Wild explains why those wanting to give the FTSE 100 (INDEXFTSE: UKX) short shrift right now may want to consider these FTSE 250 (INDEXFTSE: MCX) dividend heroes instead.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Vodafone Group dominated the financial front pages last week when it became the latest FTSE 100 dividend share to hack the annual dividend.

There’s never been a better time for investors to go hunting for income on Britain’s elite stock index, largely speaking, though Vodafone is unlikely to be the last blue-chip to slash payouts this year. I picked out a retailer and a utilities supplier in recent days that could both be on the precipice of reducing shareholder rewards, and they’re unlikely to be the only Footsie firms to curtail dividends in the coming months.

Flying high

If you fancy grabbing some dividend stocks, but want to avoid the FTSE 100 for the time being, happily there’s no shortage of income heroes to choose from. Indeed, big yielder BBA Aviation (LSE: BBA) is one FTSE 250 share I’m tipping to keep increasing dividends, and most recent financials reinforced my bullishness on the business.

I’ve long lauded the brilliant sales opportunities the company’s M&A-led growth strategy has provided, and in the first four months of 2019 revenues at group level boomed 23.1%. The result revealed the impact that recent acquisitions action, like the purchase of fuel supplier EPIC and component builder Firstmark in 2018, have had on the top line.

Despite the impact of slowing business and general aviation traffic in the US, the vast investment BBA Aviation has made in recent years to bolster its geographic footprint and range of solutions is allowing it to outperform the broader market by some distance (while US aviation activity rose just 0.3% between January and March, revenues at the company’s flagship Signature flight support division increased 1.2% on a like-for-like basis).

It’s no wonder City analysts are expecting earnings, as well as dividends, to keep rising through to the close of next year, meaning investors can enjoy juicy yields of 4.2% and 4.4% for 2019 and 2020, respectively. Chuck its undemanding forward P/E ratio of 15.4 times into the equation and I think BBA is a great stock to pick up today.

Bank on big dividends

Before I let you go, I also want to highlight Bank of Georgia (LSE: BGEO) as another share from the FTSE 250 I expect to keep growing shareholder payouts too.

I last covered the emerging market share when it announced ripping revenues growth in 2018, and I’m pleased to say trading has remained ultra-encouraging since. Last week, the bank declared profit before tax (and excluding one-off termination payments to management) exploded 10.6% between January and March to 122.7m Georgian lari, while its loan book surged by a staggering 14.7% year-on-year at constant currencies.

Bank of Georgia is thriving thanks to the twin drivers of breakneck economic growth in the Eurasian nation’s economy and the low levels of banking product penetration there. And it’s why the number crunchers are expecting earnings to keep swelling over the next couple of years here as well.

Oh, and speaking of those dividends, expectations of bright growth to the end of 2020 results in giant yields of 5.5% and 6.4% for this year and next, respectively. Chuck a low forward P/E ratio of 6 times into the bargain too, and I reckon Bank of Georgia is a terrific income titan to load up on right now.

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.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended BBA Aviation. 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.

More on Investing Articles

Investing Articles

Should I sell my FTSE All-Share index fund and buy a S&P 500 tracker instead?

Harvey Jones is wondering whether now is a good time to invest more money in the S&P 500, after a…

Read more »

Investing Articles

Should I buy dirt-cheap BT shares after the recent pullback?

BT shares were on the up but now they're sliding again after the board trimmed full-year guidance. Now Harvey Jones…

Read more »

Investing Articles

Up 28%, can the easyJet share price keep rising?

The easyJet share price has gained altitude over one year but plunged over five. Is now an attractive time for…

Read more »

British Isles on nautical map
Investing Articles

Should I buy more BAE Systems shares at 1,350p?

BAE Systems shares have had a fantastic run since early 2022, yet still don't appear overvalued. Is it now time…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

7% yield and a cheap valuation! Is this one of the best shares to buy this month?

Christopher Ruane has been looking for cheap shares to buy. This one has a 7% dividend yield, so is it…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Should I buy National Grid shares for the big dividend before it’s too late?

This year's price weakness has left National Grid shares on what looks like a tempting valuation. I hope it doesn't…

Read more »

Investing Articles

There are now 5,000 ISA millionaires! See the surprising UK dividend shares they’re buying

The number of ISA millionaires is growing all the time and guess what? They're really into blue-chip dividend shares listed…

Read more »

Blue NIO sports car in Oslo showroom
Investing Articles

Down 38% in weeks! Time to snap up NIO stock?

NIO stock's more than doubled in value over the past five years but has been on a wild ride lately.…

Read more »