The nation’s greatest dividend payers, by dint of their measurement, are FTSE 100 companies. However that doesn’t imply that FTSE 250 companies don’t spend a good bit of money on paying dividends to shareholders.

Some FTSE 250 shares have enticing dividend yields. For instance, one which has a well known and well-established enterprise at the moment yields 9.5%.

Investing £1,000 at the moment and compounding it at 9.5% yearly for a decade, it could have already got grown to £2,478.

That kind of (potential) dividend gold mine is tempting for me – however is that this the suitable share for me to purchase to attempt to obtain it?

Massive, confirmed enterprise

The FTSE 250 firm is monetary service agency abrdn (LSE: ABDN).

Its model might have a daft spelling, however it’s well-established and well-known. The agency additionally owns digital platform ii (abrdn doesn’t like mixing vowels and consonants, it appears). So this can be a large enterprise with a big buyer base and deep monetary markets expertise.

How large?

It ended final 12 months with over half a trillion kilos of property below administration and administration.

That was increased than the extent on the finish of September. I see that as encouraging, as buyers pulling more cash out than they put in has generally been a problem for abrdn in recent times. I feel it continues to be a danger.

Nonetheless, whereas its business efficiency has lengthy been inconsistent, abrdn is what I might regard as a confirmed enterprise. It made a revenue of £171m within the first half of final 12 months.

Dividend is tempting, however will it final?

However abrdn faces a spread of challenges, from robust competitors to the potential that its cost-cutting programme will sap workers morale.

The dividend is enticing. But it surely has been held regular since 2020, when it was lower by a 3rd. Previous efficiency is just not essentially a information to what’s going to occur in future. In any case, even when the dividend stays on the identical stage, the present yield could be enticing to me.

My concern is the danger for one more lower in some unspecified time in the future. The agency made simply £12m in its most up-to-date full-year outcomes. That follows a lack of over half a billion pound the prior 12 months.

To maintain its dividend, abrdn must throw off sufficient spare money to pay for it. Its earnings efficiency over the previous a number of years doesn’t fill me with confidence it would do this with sufficient regularity for me to sleep comfortably as an investor.

Clearly, the corporate is making an attempt to reshape itself.

It has been reducing prices, whereas utilizing its digital platforms to attempt to enchantment to a wider vary of potential purchasers than its conventional buyer base. That technique might work, wherein case income might develop.

However the enterprise has lengthy been an unpredictable performer. A number of the causes for that lie outdoors its management. For instance, a weak financial system might result in buyers placing much less cash into the markets, hurting funding managers’ income.

The dangers right here don’t sit comfortably with me, so for now I cannot be shopping for abrdn shares.