Dividetry yields can be both tempting and deceitful. The average performance on the British market is about 3.3%, which is an straightforward return for many investors. However, income -oriented companies often keep crops from 6% to 7%, which is generally considered vigorous.

A arduous part comes when the crops stretch much higher. The uncomplicated rule is that the performance should be best less than twice than 10 years venerable. If this is much more, it can be a warning sign, that the income looks too good to make it real.

It is also significant to dig deeper than the header number. Does the company generate enough earnings and cash to support these payments? Does he have a reasonable level of debt? Or maybe, most importantly, is there a long -term demand for its products or services?

Bearing in mind these questions, here is one FTSE 250 It seems to me that the value is worth closer.

Investing in securities secured by assets

Twenty -four income fund (LSE: TFIF) is a closed investment company that focuses on more risky, but with higher performance of British and European securities. Usually, such securities include such things as credit card debt and mortgage loans owned by smaller banks and credit unions.

At the moment, the fund offers a dividend of only 10%. In the case of investors focused on passive income, such actions can enhance the overall portfolio efficiency.

To say, it doesn’t make sense if the price of the action drifts the lower or dividends will be reduced. Encouraging that the fund looks more stable than many of its high -performance peers. The payment indicator is currently a balanced 79%, and the fund has created impressive achievements. Nine years of consistent payments, including five uncomplicated years of dividend growth, are suggested by the management involved in shareholders.

The price of the action also remained extremely stable. Over the past decade, he has traded in crowded bands from 100p to 120p, which is unusual for such a highly digamal vehicle.

Add to this minimal debt, robust cash flows and a valuation, which looks straightforward, both with a price -profit ratio (p/e) and prices for sale (p/s) at about 7.5.

Based on these factors, it seems that there are many reasons why investors considered this fund.

Risk investors should consider

Of course, there is a risk to check. Twenty -four income fund invests in structural credit products, including tranches of subordinate securities supported by assets (ABS) and securities secured by housing mortgage (RMB). This means that if the borrower underlying the default income of the fund may go.

This is not a fund for people with faint nerves. Exposure to these asset classes can be satisfying, but they bring more uncertainty than conventional corporate bonds or dividends from blue. Investors must consider the risk and reward carefully.

Lower line

In my opinion, one of the more captivating high -performance stocks in FTSE 250. It is unusual to see almost 10% of dividend profitability in combination with the history of the fixed results of the share price and consistent payments.

It will not match every investor and should ever be part of a differentiated portfolio. Despite this, for people looking for a way to enhance medium efficiency, I think it is worth considering the supply.