Should I be rushing to buy these 2 FTSE 250 stocks?

FTSE 250 stocks are a great way for investors to gain exposure to the UK market. Here, this Fools explores two he’s been following closely.

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I’ve been on the lookout for cheap FTSE 250 stocks in the last few weeks to add to my portfolio.

Here are two I’m tracking. But should I be snapping them up today?

Safestore

A stock I’ve been paying close attention to in recent weeks is Safestore (LSE: SAFE). As the name suggests, the business is the largest self-storage unit provider in the UK. This year, its share price is down nearly 20%.

Despite its poor performance, I think now may be a smart time to grab some shares.

To start, the stock looks cheap, currently trading on a price-to-earnings ratio of just 6.

On top of this, the business has posted strong growth in the last few years. And as a result, it seems that its next focus is on European expansion. This was most recently seen with a new joint venture in Germany. In prior years, its also entered markets including The Netherlands and Spain.

A further reason I’m keeping a tab on Safestore is for the passive income opportunity. As I write, the stock currently has a dividend yield of around 4%. In the last decade, it increased its dividend by a whopping 400%.

One of the largest threats to the business is its debt. With interest rates at highs not seen in years, this could become expensive to finance. With hiked rates also impacting the price of property, this could further impact the firm.

However, with impressive growth and a good yield, I view Safestore as a solid potential buy for me.

Games Workshop

I’m also keeping a close eye on Games Workshop (LSE: GAW). Unlike Safestore, it’s been an impressive year for the stock, rising by around 20%. Recently, its share price experienced a short-lived spike following the release of a strong trading update.

For the three months to August 27, the business announced a 14% jump in revenues to £121m, including a profit before tax of £57m. This continues to highlight the exciting growth the firm has seen in the last few years.

I’m also a fan of Games Workshop’s dividend. Similar to Safestore, the stock currently yields around 4%. But with its interim dividend rising to 50p, or £1.95 per share for the financial year, this is proof the business is continuing to make strides in returning greater value to investors.

The risk with dividend payments is that they can be cut by the business at any moment. However, with Games Workshop only using “truly surplus cash” to reward shareholders, I’m fairly confident of a payout.

The firm is also facing rising competition. Therefore, in order to mitigate this, it’s been diversifying its revenue streams. The most noticeable of these is its upcoming series on Amazon, which is set to expose the brand to millions of potential new customers.

It may face headwinds in the months ahead as inflationary pressures persist. Yet with strong momentum and large potential for growth, I see potential in Games Workshop.

My move

As I continue to look for more opportunities to add quality companies to my portfolio, I’ll be watching both stocks closely in the weeks ahead. Should I have any spare cash come the end of the month, I’ll be looking to open a position in both.

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.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon.com, Games Workshop Group Plc, and 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.

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