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He FTSE 250 It's a great place to look for top dividend stocks. Many top stocks have the kind of high returns that can boost an investor's passive income.
Take the following dividend stocks as an example:
| Forward Dividend Yield | Dividend growth | |
|---|---|---|
| Custodian Property Income REIT (LSE:CREI) | 8% | +12% |
| itv (LSE: ITV) | 7% | +1% |
| FTSE 250 | 3.3% | – |
You'll see that these stocks are performing better than the average FTSE 250 stock. You'll also notice that every third of these stocks is expected to increase their annual dividend this year.
This is important to me as a long-term investor. Today I'm not just looking for great dividend yields. I want companies that consistently increase their dividends year after year.
A growing dividend mitigates the impact of inflation while providing me with a growing passive income stream. When reinvested, this income can help me build wealth over time.
Choose #1
Real estate investment trusts like Custodian Property Income can be a great source of dividend income from year to year.
Real estate investment trusts (REITs) are designed to provide decent cash flow to investors. In exchange for tax advantages, they pay their shareholders a minimum of 90% of annual rental income.
Of course, this does not guarantee a dividend. The custodian's exposure to cyclical sectors such as retail, office and leisure means that rent collection and/or occupancy can disappoint during downturns, affecting payments in the process.
However, the company's large tenant list helps reduce this risk. It has 338 leases, and these have a weighted average outstanding lease term (WAULT) of just under five years, providing strong visibility.
At 77p, the company's share price is trading 21% below its estimated net asset value (NAV) per share of 97.5p. I think Custodian is one of the best stocks to consider for investors looking for low-cost passive income.
Please note that tax treatment depends on each client's individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any type of tax advice.
Choose #2
Commercial broadcasters such as ITV face the constant threat of weak advertising sales in 2025. Poor economic conditions in the UK could cause companies to keep the taps on their marketing activities closed.
However, I estimate this is due to the company's low price-to-earnings (P/E) ratio of 7.9 times. Combined with that huge dividend yield, I think it's worth serious consideration.
As a long-term investor, I'm excited about ITV stock for two main reasons. With the strike in the United States over, the prospects for its production division ITV Studios have greatly improved. You can expect revenue here to rise steadily as broadcasters and streaming companies like netflix seek to acquire new content.
I'm also impressed by the continued progress of their own streaming service ITVX. Total viewing hours here increased 14% between January and December despite intense competition from other streaming services. I expect this strong growth to continue as ITV invests heavily in technology and programming.
With a net debt-to-adjusted EBITDA ratio of less than one, ITV has room to continue investing for growth while paying large dividends. I think it's one of the top passive income shares to consider.
