2 high-quality FTSE 250 stocks to consider buying

The FTSE 250 is home to some of the best investment opportunities out there. This Fool highlights two stocks for investors to consider.

| More on:
Investor looking at stock graph on a tablet with their finger hovering over the Buy button

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.

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.


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.

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.

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.

More on Investing Articles

Photo of a man going through financial problems
Investing Articles

Down 15% in a week! What’s gone wrong with the National Grid share price?

The National Grid share price isn't supposed to crash but now it has. Harvey Jones is wondering whether to take…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

Taylor Wimpey just paid me £158.78. I’m aiming to turn that into a £100k yearly second income

Harvey Jones says small, regular dividend payments can turn a few pounds into a mighty second income, if he gives…

Read more »

A pastel colored growing graph with rising rocket.
Value Shares

These FTSE 250 shares are tipped to rise 14% to 18% in the next year!

Looking for the best FTSE 250 momentum shares to buy? Here are two that City analysts expect to soar in…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

Lloyds’ share price is up 20% in 3 months! How high can it go?

Lloyds’ share price has ripped higher recently. Here, Edward Sheldon provides his view on the level it could potentially climb…

Read more »

Investing Articles

Why the Rolls-Royce share price could continue to outperform

The Rolls-Royce share price keeps moving forward, but this Fool thinks it's still behind where it ought to be after…

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

The City expects explosive growth in earnings from this almost-penny stock

It’s rare to find earnings predictions as robust as those for this not-quite-a-penny stock, so I’d research and consider it…

Read more »

Investing Articles

As earnings rise 600%, is Nvidia still the best AI stock to buy?

With the supply and demand equation still looking strong for Nvidia, is the stock still the best AI opportunity for…

Read more »

Value Shares

Cheap UK stocks are soaring! Here’s 1 to consider buying now

In recent weeks, many UK stocks have surged. Here, Edward Sheldon highlights a blue-chip FTSE 100 share he believes could…

Read more »