Looking for dividend stocks? Here’s a discounted investment trust to consider !

Story by Royston Wild

The Motley Fool

Here is one of my favourites, and especially at the moment as economic uncertainty grows.

Trust the process

Real estate investment trusts (REITs) are designed in a way that can make them ideal candidates for passive income. In exchange for tax reductions, these investment vehicles must pay at least 90% of yearly rental profits out in dividends.

This doesn’t guarantee that shareholders will enjoy a large and/or growing second income, as cash rewards are still tied to earnings. But it does mean the business has less flexibility to decide to limit, reduce, or eliminate dividends than other shares.

As a provider of residential property — and more specifically for adults with care and support needs — rental income and occupancy rates tend to be more stable than those of trusts operating in more cyclical sectors.

In addition, the rents it receives are effectively funded by local authorities, who pay housing benefit to approved providers who lease its properties. Changes to government funding could impact this favourable funding model. But I’m optimistic that this is unlikely given the huge savings that trusts like this provide the taxpayer.

According to Social Housing REIT,

Residents living in specialised Supported Housing cost the government about £200 less per week than being in a residential care home and nearly £2,000 less per week than remaining in in-patient care.

As a consequence, the trust estimates that its own portfolio saves the government around £71.6m each year.

8.9% dividend yield

I don’t think these qualities are reflected in the cheapness of Social Housing REIT’s shares.

At 61.9p per share, the trust also trades at an 45.8% discount to its estimated NAV per share of 114.1p.

The investment trust also offers excellent value from a passive income perspective. Its forward dividend yield of 8.9% is one of the highest across the REIT asset class. To put that into context, the FTSE 100 average sits way back at 3.9%.

Social Housing REIT’s share price has been negatively impacted by higher interest rates in more recent years. This has depressed the value of its assets and driven up borrowing costs.

While it remains sensitive to future rate movements, I believe that — on balance — this investment trust is an attractive dividend payer to consider today.

The post Looking for dividend stocks? Here’s a discounted investment trust to consider! appeared first on The Motley Fool UK.

Assura leaves the watchlist after agreeing to a takeover bid.

Dividend History

Ex-Dividend	Amount	Pay Date
Apr 24, 2025	£0.800	May 2, 2025
Mar 20, 2025	£0.06243	Mar 28, 2025
Feb 13, 2025	£0.06325	Feb 21, 2025
Jan 16, 2025	£0.06537	Jan 24, 2025
Dec 19, 2024	£0.06144	Dec 27, 2024
Nov 21, 2024	£0.06132	Nov 29, 2024

SDIP have declared a dividend for April but I believe the decimal point is in the wrong place and the dividend should be £0.0800

Can you help me understand how to turn any puzzle into plain understanding?

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• Experiment: Test out potential solutions; trial and error is a great teacher.
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In a sense, puzzles teach us to become flexible thinkers. It’s about embracing curiosity and learning along the way.

Co Pilot

How to Collect Safe 10%+ Dividends – No Matter What the Market Does

What 2022 Says About This Crash (Including When to Buy These 8%+ Dividends)

by Michael Foster, Investment Strategist

The pullback we’ve seen in the last week calls to mind the last big selloff we saw – in 2022.

That’s what I want to draw your attention  today (but only for a moment !), the 2022 experience still has a lot to tell us about how markets really view the possibility of a recession. Along with that, a quick look back can also help us develop our strategy for investing in 8%+ yielding closed-end funds (CEFs) from here.

Back then, the fear was that a combination of inflation and recession would cause stocks to plunge. And plunge they did. In fact, the market gave up on everything.

Stocks, Bonds? They All Suffered the Same Fate in ’22

All in all, the S&P 500 – shown above by the performance of the SPDR S&P 500 ETF Trust (SPY), in blue – surrendered nearly 20% of its value on a total-return basis. But notice, too, the SPDR Bloomberg High Yield Bond ETF (JNK), the junk-bond index fund that tracks bonds issued by riskier companies . It too took a hit as worries of a recession literally hit 100%.

High-Yield Credit Treads Water While Stocks Sink

Not only are the declines worse at this point in 2025 than in 2022 for stocks, but the high-yield corporate debt is down just slightly down. That isn’t just strange, it’s historically unprecedented.

Long-time readers know why this is happening, since we’ve been discussing this for a long time in my CEF Insider service. There, I’ve been recommending high-yield bond CEFs because they’re better positioned than stocks to handle this macro volatility in the long haul. Yields are currently very high, corporate defaults are very low, and therefore, so-called “junk” bonds are a great place to get a big income stream now.

But this also tells us something important: The markets don’t really believe a recession is coming – at least, not yet.

In a recession, companies pull back on spending and struggle to pay their bills, causing ETFs like JNK to drop. So it made sense for investors to sell off that fund in 2022.

Before we go further, I should touch on a topic I have avoided so far: interest rates. Fed Chair Jerome Powell has made it clear that he will not cut interest rates faster this year, despite the market’s tariff-driven selloff. As of this writing, investors are taking him at his word, believing we’ll have three or four rate cuts by the end of the year:

So, if stocks won’t get a break from faster interest-rate cuts, and the bond market isn’t pricing in massive rate cuts, the market expectation is that we will see higher inflation from the tariffs and lower growth from their economic drag. You can disagree with this view, but it’s the reason why stocks have been falling.

Will this view continue to dominate Wall Street ? That will depend on what ultimately happens around the tariffs. If they are lowered further, investors will likely change their attitude and push stocks higher.

But until then, expect volatility to stay high and expect bonds to remain a refuge (although, as we’ve seen in the last few days, even that has started to wane a bit, as well).

Fortunately, this situation will not last forever. Stocks will ultimately recover their losses from this last week.

That makes now a good time to start to look at buying into heavily discounted CEFs, which have seen their dividend yields jump in this selloff. But I recommend adding to positions slowly, as more volatility could cause CEFs to dip in the short term before they fully recover in the long run.

How to Collect Safe 10%+ Dividends – No Matter What the Market Does

Even with this week’s bounce, the tariffs aren’t going away, and markets are likely to remain volatile. But here’s the truth: You can take steps to ease your mind, even in the midst of a mess like this one.

The key ? High – and monthly – dividends that roll in no matter what. With your income stream locked down, you can worry a lot less about daily share-price gyrations.

I’ve hand-picked a select group of high-yield closed-end funds (CEFs) that deliver just that: a 10% average dividend and steady monthly income – even when stocks are falling.

I’m talking about safe, recession-resistant payouts of 10%+ from professionally managed funds trading at big discounts right now. These overlooked income plays don’t just deliver peace of mind – they offer powerful upside when the market bounces back.

Contrarian Outlook

Activity Breakdown

• Top 10 Holdings

Name	Holdings
British American Tobacco PLC	5.6%
GSK PLC	5.5%
Shell PLC	4.2%
Lloyds Banking Group PLC	4.2%
BP PLC	3.8%
DCC PLC	3.6%
WPP PLC	3.4%
Rio Tinto PLC Registered Shares	3.4%
Tate & Lyle PLC	3.3%
Inchcape PLC	3.2%

The recent addition to the Snowball was bought for the near dividend and to try and emulate the above chart, whilst history doesn’t always repeat it often rhymes. It’s possible the share price could fall from here before finding a floor.

MRCH offers a lower yield but a secure dividend to balance the higher risk yields in NESF, SEIT and FGEN a blended yield of 7%. Unless the price of MRCH falls out of bed, future dividends will be used to buy more shares in the higher yielders.

I bought for the Snowball 1798 shares in MRCH for 9k.

Buying yield 5.8%

Income

Income from Merchants’ investment portfolio saw a modest year-on-year decline from the record year in 2024, with revenue earnings per ordinary share at 29.4p (2024: 30.5p), representing a 3.6% reduction.

Despite this, earnings fully covered the total proposed and declared dividends for the year, allowing for a small addition to revenue reserves, which stood at 18.8p per ordinary share at year-end.

Shareholders will appreciate that one of the key advantages of the investment trust structure is its ability to smooth income distributions-drawing on reserves during challenging market conditions and replenishing them in stronger periods. It is encouraging to see that, following the Board’s strategic use of reserves to sustain dividends through the COVID-19 period, we have now been able to rebuild reserves over recent years.

43 years of dividend growth

The Board proposes a final dividend of 7.3p per share for shareholder approval at Merchants’ upcoming AGM on 20 May 2025. If approved, the dividend will be paid on 29 May 2025 to shareholders on the register at the close of business on 22 April 2025, with an ex-dividend date of 17 April 2025. A Dividend Reinvestment Plan (DRIP) is available, with an election deadline of 7 May 2025.

This brings the total proposed dividend for the year to 29.1p (2024: 28.4p), representing a 2.5% increase over the previous year. Notably, this marks Merchants’ 43rd consecutive year of dividend growth, reinforcing our position as an Association of Investment Companies’ (AIC) Dividend Hero.

£££££££££££££££££

With the two recent trades the current income has been reduced slightly but added a safety net of ‘secure’ dividends.

The Snowball allows costs of five pounds for buys and ten pounds for sales.

The current charges for both are five pounds but some purchases have stamp duty charged, so along with no interest is added the account for cash not invested the figures roughly balance.

As always, timing then time in.

The year end dividend is dependent on any surplus cash being paid as a dividend around October.

13 March 2025

TwentyFour Select Monthly Income Fund Limited

Re: Dividend Announcement

The Directors of TwentyFour Select Monthly Income Fund Limited (“SMIF“), the listed, closed-ended investment company that invests in a diversified portfolio of credit securities, have declared that a dividend of 0.5 pence per share will be paid, in line with the Prospectus, representing the regular monthly targeted dividend for the financial period ended 28 February 2025 as follows:

Ex-Dividend Date 20 March 2025

Record Date  21 March 2025

Payment Date  4 April 2025

Dividend per Share  0.50 pence (Sterling)

I’ve bought 11,666 shares in SMIF for 10k.