OSB Group, the specialist mortgage lender listed on the FTSE 250, is drawing fresh attention from income-focused investors hunting for reliable dividend returns.
The company, which operates through brands including Kent Reliance and OneSavingsBank, posted a full-year dividend of 35.3p per share in its latest results.
For an investor holding 10,000 shares at the current price of around 547p, that translates to approximately £3,530 of passive income this year, subject to ex-dividend dates.
Building a position of that size would require a capital outlay of roughly £54,700, meaning most investors would likely accumulate shares gradually over several years through regular contributions or reinvested dividends.
The board increased the total dividend by 5% alongside launching a £100m share buyback programme, signalling a clear commitment to returning cash to shareholders.
OSB’s payout ratio sits between 46% and 49%, a level that suggests the dividend is comfortably covered by earnings, while cash coverage of 2.83 times adds further reassurance for income seekers.
Management has also guided for another 5% dividend increase in 2026, indicating continued confidence in the bank’s underlying cash generation and profitability.
The shares have risen roughly 20% over five years and carry a dividend yield of between 6% and 7%, with 12 consecutive years of ordinary dividend payments on record.
Like any smaller bank operating in the UK financial sector, OSB carries meaningful risks, particularly its significant exposure to the domestic property market where falling house prices or rising arrears could weigh on profitability.
The FTSE 250 more broadly remains a productive hunting ground for income investors, with other names such as Harbour Energy, Greencoat UK Wind, and Primary Health Properties also offering yields above 6%.
Diversifying across 10 to 20 stocks from different sectors is a prudent approach, reducing the damage if any single company or industry runs into difficulty and smoothing overall income streams.
OSB Group may not represent a core portfolio holding for every investor, but as a satellite position within a broader income strategy, its yield profile and dividend track record make a compelling case for consideration.