Many FTSE 250 stocks are underrated. They gain nowhere near the same amount of attention as FTSE 100 constituents, yet they offer the same if not better growth opportunities.
Here are two that investors should consider buying today.
Safestore
I want to get the ball rolling with Safestore (LSE: SAFE). I believe it’s one of the best stocks that the FTSE 250 has to offer. It’s most certainly up there as one of my favourite stocks that I own.
Investors clearly don’t agree with me. Over the last 12 months, the storage behemoth has seen 24.6% shaved off its price. Nevertheless, I’ve used that as a chance to add to my holdings and I’ll continue to do so.
I like its 4% yield. While that tops the FTSE 250 average of 3.4%, it’s not exactly the highest out there. However, continuously hiking its dividend payment for the last 14 years, something the business has done, is nothing to scoff at.
It’s a leader in the UK with 133 units, but it’s not resting on its laurels, despite its dominant market position. European domination is next on its list. We’ve already seen this in action with expansion into exciting markets such as Germany.
Like many companies at the moment, interest rates are the biggest threat to Safestore. Not only does it make the £810m debt on its balance sheet more difficult to pay off, but it also impacts property valuations.
Nevertheless, I see real long-term value in Safestore at its price today. As a shareholder, I’m excited about where the company is set to go in the years to come.
JD Wetherspoon
The renowned Warren Buffett says investors should seek businesses with moats. I think JD Wetherspoon (LSE: JDW) has one with its cheap pricing.
Unlike Safestore, this stock has put up a strong performance in the last year. During that time, it’s gained 7.2%. Down 6.9% this year, however, now could be a smart time to swoop in and buy some shares.
That fall comes after the company’s latest interim trading report. A reduction in the total number of pubs as well as a decline in earnings per share (EPS) spooked shareholders.
However, I think reducing the number of its pubs could be a good move. It allows JD Wetherspoons to focus on its stronger assets. That makes sense.
What’s more, its latest report showed that excluding “separately disclosed items”, which included a loss on the disposal of some of its pubs, a property impairment charge, and a charge relating to interest rate swaps, EPS actually rose from 1.1p to 20.3p.
To go alongside that, revenues jumped 8% while operating income rose from £37.4m to £72m
The largest hazard it faces is the cost-of-living crisis. Consumers potentially have less to spend, and this will squeeze margins. Inflation has also driven up costs too.
But at its current price, I’m willing to look past these issues in favour of long-term potential. With this stock, I see just that.
I think both stocks should be strongly considered by investors seeking investment opportunities in the FTSE 250.
The post 2 high-quality FTSE 250 stocks to consider buying appeared first on The Motley Fool UK.
5 stocks for trying to build wealth after 50
Inflation recently hit 40-year highs… the ‘cost of living crisis’ rumbles on… the prospect of a new Cold War with Russia and China looms large, while the global economy could be teetering on the brink of recession.
Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.
Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…
We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.
Claim your free copy now
More reading
I reckon this FTSE 250 business has all the winning ingredients for me to lock in high profits
2 FTSE 100 and FTSE 250 stocks to consider buying for the new ISA year!
1 under-the-radar FTSE 250 gem this Fool loves!
This FTSE 250 stock is down 22%. I can’t get enough of it!
Forget gold! I’d buy UK shares to try and become a millionaire
Charlie Keough has positions in Safestore Plc. The Motley Fool UK has recommended Safestore Plc. 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.
