2 FTSE 250 growth shares I’d buy TODAY

The FTSE 250 is home to some great growth stocks. Here, Edward Sheldon highlights two shares in the index he believes have solid growth potential.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

While the FTSE 100 is the dominant UK stock market index, investors shouldn’t ignore the FTSE 250. This index, which contains the largest 250 stocks on the London Stock Exchange outside the FTSE 100, is home to some great companies.

Here, I’m going to highlight two FTSE 250 stocks I think are worth buying right now. I believe these stocks have the potential to provide investors with both attractive long-term gains as well as a nice stream of dividends.

A FTSE 250 technology stock

The first I want to highlight is Computacenter (LSE: CCC), a leading provider of computer services to businesses and government organisations.

The reason I’m bullish on this particular stock is that ‘digital transformation’ is likely to be a dominant theme in the years ahead. If there’s been one takeaway from Covid-19 for businesses, it’s that they need to be fully digitalised in order to be competitive.

As a result of Covid-19, many companies are now investing heavily in technology associated with cloud computing (so employees can work remotely), data analytics, and cybersecurity. And that can only benefit IT companies such as Computacenter.

Computacenter posted an encouraging update in December. It said the positive trading it had experienced in the second and third quarters of the year had continued into the fourth quarter. As a result, it upgraded its profit outlook. Another trading statement is expected tomorrow. I expect this update to be good as well.

CCC currently trades on a forward-looking P/E ratio of about 20. The prospective dividend yield is around 2%. I see this valuation and yield as very attractive, given the long-term growth potential here. I’d buy the stock today.

A play on the UK property market

Another FTSE 250 stock I believe looks quite attractive right now is Howden Joinery (LSE: HWDN). It’s a leading supplier of fitted kitchens (to trade customers) that has over 730 depots across the UK.

The reason I’m bullish here is that, over the last 12 months, Britons have saved a record amount of money in lockdown. In the second quarter of last year, for example, deposits in UK bank accounts surged by a massive £45bn. I can see a lot of this money going into home renovations in the years ahead. Howden Joinery should benefit. Meanwhile, in the long run, Britons’ obsession with real estate should keep demand for Howden’s products high.

Recent trading updates from Howden Joinery have been very positive. In December, for example, the company advised that revenue for November was up 19%. Meanwhile, last week, it said recent trading has been stronger than anticipated with good profit and cash performances. These updates suggest demand for new kitchens from UK homeowners is already elevated. 

Howden Joinery shares currently trade on a forward-looking P/E ratio of 21.6. The prospective dividend yield is about 1.7%. At that valuation, I see the FTSE 250 stock as a buy.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has recommended Howden Joinery Group. 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.

More on Investing Articles

Black father and two young daughters dancing at home
Investing Articles

1 FTSE 250 stock I own, and 1 I’d love to buy

Our writer explains why she’s eyeing up this FTSE 250 growth phenomenon, and may buy more shares in this property…

Read more »

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »