With dividends of up to 12.6%, these could be the FTSE 250’s best passive income stocks
The FTSE 250’s stuffed full of high-yielding dividend shares, many of which are offering returns close to 10%. James Beard takes a look at three of them.
Posted by James Beard
Published 2 February
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Although the FTSE 250‘s full of passive income opportunities, it’s sometimes overlooked by investors. In fact, the index is presently offering a yield higher than the FTSE 100, its more famous cousin.
Here are three members of the UK’s second tier index of listed companies that currently have an amazing combined average yield of 9.6%. I think all are worth considering for those on the lookout for dividend shares.
As safe as houses?
Despite suffering a torrid time following the pandemic, UK housebuilder Taylor Wimpey (LSE:TW.) is currently paying a dividend of 8.8%. And with the housing market appearing to be recovering slowly — driven primarily by an improvement in mortgage affordability — I think the worst could be over.
In 2025, completions were 636 (6%) higher than a year earlier. And the group was able to raise its average selling price by £16,000 (5%). Despite this, as a reminder of how post-Covid inflation has affected the cost of building materials, operating profit was broadly flat. Its margin fell from 12.2% to 11%.
But with interest rates expected to fall over the coming months, this could help reinforce the early-stage recovery. And despite its recent woes, the group has a healthy balance sheet. Further ahead, the government’s proposed planning reforms should benefit Taylor Wimpey.
Becoming more efficient
The SDCL Energy Efficiency Income Trust (LSE:SEIT) has a current yield of 12.6%. Although it’s been steadily increasing its dividend, the dramatic fall in its share price has been the biggest factor behind this incredible return.
| Financial year | Dividend per share (pence) | Share price (pence) | Yield (%) |
|---|---|---|---|
| 31.3.21 | 5.50 | 111 | 5.0 |
| 31.3.22 | 5.62 | 118 | 4.8 |
| 31.3.23 | 6.00 | 84 | 7.1 |
| 31.3.24 | 6.24 | 59 | 10.6 |
| 31.3.25 | 6.32 | 48 | 13.2 |
Source: London Stock Exchange Group/company reports
The trust now trades at a huge 42% discount to its net asset value (NAV). Part of this is explained by difficulties in valuing unquoted companies. But its relatively high debt has also been a concern. The trust has borrowed more than the 65% of its NAV that’s allowed under its rules. Asset disposals are underway to reduce this.
However, I think companies providing energy efficiency solutions are going to be among the long-term winners. We will get to net zero one day, but it might take longer than some, including shareholders in SDCL, would like. In my opinion, the trust’s been marked down more due to sector-wide concerns than anything specific to its own operations.
Going shopping
Primarily because of its 7.5% yield, Supermarket Income REIT (LSE:SUPR) is my favourite real estate investment trust (REIT). During its last financial year (30 June 2025), it reported 100% occupancy and no bad debts. This is testimony to the quality of the well-known grocery names that occupy its buildings in the UK and France.
Potential challenges include higher interest rates and a cyclical commercial property sector. Investors should also be aware that massive share price growth is unlikely.
But by whatever method we buy our groceries, whether it be online or in-store, there’s always going to be a need for physical shops. And with an average unexpired lease term of 12 years — and the majority of its leases containing provisions for inflation-linked rent increases — the REIT has plenty of visibility over future income levels.
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Some quick maths
Although I know there can never be any guarantees with dividends, a £10,000 investment spread equally across all three could yield £963 in year one. In my book, that’s worth considering.
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