I mostly invest in shares paying good dividends these days, and the FTSE 250 offers some attractive ones. And with the mid-cap index being generally better known for its growth candidates, I’m seeing plenty of those too now that it’s down.
Looking for FTSE 250 shares to invest in today, the following three would make it on to my shortlist.
A dividend share
I last looked at Jupiter Fund Management (LSE: JUP) in April, when the share price was down. Since then, it’s fallen another 20%. Jupiter shares have now declined by 41% over the past 12 months.
Investment managers tend to fall out of favour when economic conditions turn tough. With interest rates rising and many investors looking for safety, Jupiter has seen an outflow of funds. And that drain on the company might not be over yet.
But the share price fall has pushed the dividend yield to 10.7% now. That’s based on last year’s dividend, which was covered 1.85 times by earnings. I think I see a reasonable safety buffer there, should this year’s dividend decline, while still leaving a good yield.
Should Jupiter reduce its payout, I’d expect the share price to suffer further falls. But I reckon a downturn is a great time to buy FTSE 250 fund managers.
A growth share
With aviation in chaos and airlines in the news, when it comes to growth shares I’m immediately drawn to easyJet (LSE: EZJ).
The latest troubles, including staffing problems, flight cancellations, and threatened strike action, have depressed the easyJet share price further. We’re now looking at a 56% fall over the past 12 months. Oh, and it’s down 70% over five years.
But the airline’s summer update seemed reasonably cheery. It seems that “demand for travel has returned with April and May passengers seven times the same months last year“. In a lot of ways, it’s the quick recovery in demand that’s behind the operational problems hitting airlines now.
The company expects Q3 capacity to be up around 87% of 2019 levels, reaching 90% by Q4. It’s hard to put a valuation on the shares with a loss expected this year. And there are clearly short-term risks. But if volumes do recover as hoped, I think this could be a good time for investors to buy.
A value share
Searching among FTSE 250 shares on low price-to-earnings (P/E) ratios, I’m drawn to Centamin (LSE: CEY).
The gold miner’s share price has dropped 23% over 12 months. On forecasts, that indicates a P/E of only around nine. And the dividend looks set to yield 5.8%.
It’s probably down to the lacklustre performance of gold this year. At $1,830 per ounce, it’s below where we might expect it to be in times like the present, when investors are typically seeking safety.
But if the current economic squeeze should continue, precious metals prices may yet rise significantly above current levels. And that could push Centamin shares to a higher level. On the risk side, Centamin’s production costs are not the lowest in the business. So sustained gold weakness could send it down further.
