I’d buy these FTSE 250 stocks and hold them for a decade

This Fools thinks buying FTSE 250 stocks is a great way to build wealth. Here are two he’d buy today and hold for the long run.

| 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.

BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.

Image source: Getty Images

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.

With March fast approaching, I’m keen to continue buying FTSE 250 stocks. Offering great growth opportunities, the plan is to buy them today for an attractive price and hold for at least a decade.

The average return of the index since the early 1990s is a whopping 11%. Of course, I’m aware that past performance is no indication of future returns, but I’m confident these two shares can thrive moving forward.

Wargames leader

Of the stocks I currently own, one of my favourites is Games Workshop (LSE: GAW). That’s because I’m so bullish on the long-term outlook for the business.

One reason for that is the grip it has on the miniature wargames market. When it comes to competition, it doesn’t really have any.

It also provides stable passive income through its 4.5% dividend yield. And while dividends are never guaranteed, the fact Games Workshop only uses “truly surplus cash” to pay its shareholders provides me with confidence. In the last 10 years, its dividend has experienced major growth.  

With a price-to-earnings (P/E) ratio of 23, there’s an argument to be made that the stock is expensive. While it doesn’t have much competition at the moment, I’d expect that to ramp up in the years ahead as the market becomes increasingly lucrative.

However, I’d argue that I’m paying for quality. And to offset threats such as rising competition, the business has diversified, most recently seen by its latest deal with Amazon to turn its Warhammer brand into a string of films and TV content.

TV stalwart

I’ve also been watching ITV (LSE: ITV) closely. Unlike Games Workshop, which operates in an industry rising in popularity, ITV is the opposite.

Its advertising revenues have taken a hit in the last few years. Given recent trends, it’s evident traditional advertising may no longer be the thriving industry it once was. As such, its share price has fallen drastically.

But I’m not giving up on ITV just because of that. And with a P/E ratio of 8.5, I see now as a smart time to swoop in and buy some shares.

At its cheap price, the stock yields an impressive 8.6%. That’s way above the FTSE 250 average of 3.4%.

What’s more, ITV is undergoing a strategic transformation that will put more emphasis on its Studios and Digital revenues. For example, it has invested in its online streaming platform ITVX, which helped its digital revenue jump by 24% in the first half of 2023.

ITV Studios also saw its revenue rise by 8% to £1bn. The business expects ITV Studios to “deliver total organic revenue growth of at least 5% per annum on average to 2026”.

Buy and hold

At their current prices, I think both of these stocks have the potential to provide me with some healthy gains in the next decade.

With Games Workshop, I’m excited to see where it’ll take its licensing business in the years ahead. For ITV, I’m bullish on the long-term outlook of its digital strategic transformation.

With any investable cash, I’m keen to pick up 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 positions in Games Workshop Group Plc. The Motley Fool UK has recommended Amazon, Games Workshop Group Plc, and ITV. 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

Photo of a man going through financial problems
Investing Articles

I asked ChatGPT to name the FTSE 250 share it would buy in a heartbeat – and it went mad!

Harvey Jones wondered whether artificial intelligence was up to the job of finding him a brilliant FTSE 250 share to…

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

Is the BP share price primed for lift off?

As an activist investor takes a substantial holding in BP, Andrew Mackie assesses what it will take to energise the…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

No savings? I’m using the 5-step Warren Buffett method as I aim to get rich

Christopher Ruane outlines a handful of investment techniques he uses, inspired by the incredible stock market record of Warren Buffett.

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

With a spare £3,000, here’s how a new investor could start buying shares

Our writer explains how someone with a few thousand pounds and no prior stock market experience could start buying shares…

Read more »

UK money in a Jar on a background
Investing Articles

£10,000 invested in Greggs shares in 2020 has made this much passive income…

Greggs shares have struggled lately due to economic weakness and rising costs. Are they still worth considering for an ISA…

Read more »

British union jack flag and Parliament house at city of Westminster in the background
Investing Articles

Don’t look now, but the FTSE 100’s beating the S&P 500 in 2025…

So far this year, UK stocks have been doing better than their US counterparts. So is the FTSE 100 the…

Read more »

Investing Articles

How much would someone need in UK shares to earn £5,000 in passive income each month?

Thousands of Stocks and Shares ISA investors have built up more than a million pounds and can sit back and…

Read more »

Investing Articles

£10,000 invested in Tesla stock 1 month ago is now worth…

Tesla stock is remarkably volatile for a mega-cap company. While this presents some opportunities for investors, it’s also inherently risky.

Read more »