2 top FTSE 250 dividend stocks I'd buy for my ISA

As my Foolish colleague Rupert Hargreaves was quick to point out, McCarthy & Stone(LSE: MCS) has been the victim of investor indifference in recent times as the political and economic uncertainty washing through the UK has dented revenues growth.

The retirement property builder has seen its share price decline almost 25% over the past year, but tough market conditions are not the only thing that has whacked market sentiment. Indeed, fears over the potentially-crushing impact of changes to legislation that governs ground rents has also coloured opinion against the FTSE 250 business.

McCarthy & Stone said this month that it's seeking "swift clarification" from the government over its request that retirement properties be exempt from rules that would see ground rents set to zero. The issue is causing the firm no shortage of angst and it said "we continue our planning to mitigate the potential impact on the business, including maintaining discipline around our cash position and adopting a more measured approach to securing land."

Hot yields

Clearly McCarthy & Stone isn't without its degree of risk. But I would argue that the troubles facing the company are baked in at current prices, the firm dealing on a forward P/E ratio of 9.5 times.

And for glass-half-full investors, I believe there's plenty to get stuck into. Despite the impact of Brexit uncertainty on homebuyer appetite right now, the company's order book still rose 16% year-on-year as of the close of February, to £487m. And once current jitteriness subsides from the broader market, I expect sales to rip higher again as a symptom of Britain's fast-ageing population.

City analysts are still expecting earnings to rise 10% and 18% in the years to August 2018 and 2019 respectively, despite tough trading conditions. And so dividends are expected to keep leaping higher -- last year's 5.4p per share reward is predicted to step to 5.6p this year and again to 6.3p in fiscal 2019.

Investors can therefore enjoy bumper yields of 3.9% and 4.4% for this year and next. And rest assured, these projections are also looking very safe. Dividend coverage ranges between 2.7 times and 2.8 times through to the close of next year, comfortably above the accepted security benchmark of 2 times and above.

Stamp your mark

I believe another exceptional FTSE 250 selection for income chasers is Royal Mail (LSE: RMG).

Tough competition in the UK is expected to cause a 6% earnings drop in the year to March 2018. Still, the strength of the courier's balance sheet means this isn't expected to put paid to further dividend growth, so last year's 23p per share reward is expected to swell to 23.7p this year.

And for fiscal 2019, supported by a (albeit fractionally) return to earnings growth, the dividend is predicted to rise to 24.7p. As a result, yields for this year and next clock in at a mighty 4.5% and 4.7%, respectively.

For the upcoming year, Royal Mail deals on a meagre P/E ratio of 12.6 times. And this is far too cheap in my opinion given the brilliant revenue opportunities created by the growing e-commerce segment, not just in Britain but for its expanding European operations, too.

Buy-And-Hold Investing

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.