It’s simple to miss the FTSE 250 as a supply of dividends. However some corporations within the mid-cap index supply huge yields, and forecasts present them rising even larger.

Let’s begin with a take a look at abrdn (LSE: ABDN), whose forecast dividend yield is up at a whopping 10.8%.

That’s partly because of a weak share price, down 54% up to now 5 years. A Q3 replace on 24 October didn’t assist, knocking the shares for six. Nicely, for a ten% fall on the day, no less than.

Dealer forecasts may should be up to date. However for now no less than, they appear strong, and present the dividend steady till no less than 2026. Over that point although, the dividend money wouldn’t be lined by forecast earnings.

Outflows

With that Q3 replace, the corporate reported a 2% rise in property underneath administration. That’s optimistic, however modest. And we heard of outflows throughout Asia and rising markets.

The corporate advised us that its “transformation programme stays on monitor“. However till a change really transforms, uncertainties like we see right this moment stay a giant threat.

Can abrdn maintain paying the dividend whereas it stems these annoying outflows and will get earnings rising once more? If it may possibly, that 10.8% yield and a dealer price goal of 159p (up 35%) may make it one to think about.

Dividend forecasts might be unsuitable, although, and price targets wronger.

Mortgage returns

OSB Group (LSE: OSB) is a specialist mortgage lender, which could not sound like a fantastic enterprise to be in when rates of interest are falling.

The share price has been having a troublesome time in 2024, down 20% 12 months to this point. However there’s a hefty 9% dividend yield on the playing cards.

What’s extra, forecasts present it rising to 9.3% by 2026, primarily based on the present share price. And so they present loads of cowl by earnings too — of two.4 occasions this 12 months, and a couple of.8 occasions by 2026.

And the corporate is shopping for again its personal shares, so the board should assume they’re good worth now. With a ahead price-to-earnings (P/E) ratio of solely 4.6, the board may be proper.

Interim droop

However an interim report on 15 August gave the shares a kicking, knocking 19% off their worth in a single day.

It appears it’s down to strain on internet curiosity margins and mortgage competitors. And Financial institution of England charges certainly have some method to drop but.

So what do I feel? Nicely, we’re a inventory with a market cap of simply £1.4bn right here. That’s a far cry from the £34bn valuation of Lloyds Banking Group, the UK’s largest mortgage lender.

And smaller banks and monetary companies corporations have a tendency to return off worse in any squeeze.

Nonetheless, that low valuation and excessive dividend yield might make OSB one to think about for courageous traders.

Dividends galore

There are loads extra excessive dividend yields amongst FTSE 250 shares, typically with strong earnings cowl and powerful forecasts.

The actual lesson for me is that we should always simply neglect what index a inventory is in and give attention to the enterprise itself.