It’s easy to overlook the FTSE 250 as a source of dividends. But some companies in the mid-cap index offer big yields, and forecasts show them rising even higher.

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

That’s partly due to a weak share price, down 54% in the past five years. A Q3 update on 24 October didn’t help, knocking the shares for six. Well, for a 10% fall on the day, at least.

Broker forecasts might need to be updated. But for now at least, they seem solid, and show the dividend stable until at least 2026. Over that time though, the dividend cash would not be covered by forecast earnings.

Outflows

With that Q3 update, the company reported a 2% rise in assets under management. That’s positive, but modest. And we heard of outflows across Asia and emerging markets.

The company told us that its “transformation programme remains on track“. But until a transformation actually transforms, uncertainties like we see today remain a big risk.

Can abrdn keep paying the dividend while it stems those annoying outflows and gets earnings rising again? If it can, that 10.8% yield and a broker price target of 159p (up 35%) might make it one to consider.

Dividend forecasts can be wrong, though, and price targets wronger.

Mortgage returns

OSB Group (LSE: OSB) is a specialist mortgage lender, which might not sound like a great business to be in when interest rates are falling.

The share price has been having a tough time in 2024, down 20% year to date. But there’s a hefty 9% dividend yield on the cards.

What’s more, forecasts show it rising to 9.3% by 2026, based on the current share price. And they show plenty of cover by earnings too — of 2.4 times this year, and 2.8 times by 2026.

And the company is buying back its own shares, so the board must think they’re good value now. With a forward price-to-earnings (P/E) ratio of only 4.6, the board might be right.

Interim slump

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

It seems it’s down to pressure on net interest margins and mortgage competition. And Bank of England rates surely have some way to drop yet.

So what do I think? Well, we’re looking at a stock with a market cap of just £1.4bn here. That’s a far cry from the £34bn valuation of Lloyds Banking Group, the UK’s biggest mortgage lender.

And smaller banks and financial services companies tend to come off worse in any squeeze.

Still, that low valuation and high dividend yield could make OSB one to consider for brave investors.

Dividends galore

There are plenty more high dividend yields among FTSE 250 stocks, often with solid earnings cover and strong forecasts.

The real lesson for me is that we should just forget what index a stock is in and focus on the business itself.