The world’s stock markets are pulling back from the Trump tariff slump, so might that mean a new bull run for the FTSE 100 and FTSE 250? It’s been a while since we’ve had a lengthy mid-cap growth spell. But I see a few stocks that look like they could be set for a few years of gains.
Turned a corner?
I can’t see demand for health services doing anything but grow. But companies holding real estate have suffered falls in asset values. Maybe that’s why Primary Health Properties (LSE: PHP), the real estate investment trust which holds and leases out healthcare properties, is down by a third in the past five years.
PHP’s been in a bidding battle for Assura in the same business. It looks like it’s been beaten by a consortium of funds, though the ink isn’t dry on any contracts yet. Could there be a bid for PHP? I don’t know, and I’d never buy on speculation. But the share price has started to pick up.
Being partly funded by borrowing, it’s at risk from interest rates. I could see continued short-term price weakness, but with a forecast 7% dividend yield, it has to be one to consider for the long term.
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Cheap defence
QinetiQ (LSE: QQ.) looks cheap to me. In a March update, the company spoke of “tough near-term trading conditions“, which have led to “further delays to a number of contract awards“.
There’ll be a £140m impairment charge plus some one-off charges this year. And forecasts predict a loss per share with FY results due on 22 May.
Short-term ups and downs are common in the defence sector which depends on long-term contracts. But it must hold the share price back.
QinetiQ is in a low-debt situation and has just extended its share buyback programme to £200m. Forecasts put the 2026 price-to-earnings (P/E) ratio at 15.5, dropping to 13.5 by 2027.
We could have another weak year for the share price. But with sector giant BAE Systems on a P/E of 24, I think QinetiQ has to be worth considering as a defence investment.
Bargain retailer
B&M European Value‘s (LSE: BME) a discount retailer owning the B&M and Heron Foods chains. In these days of renewed cut-price supermarket wars, it’s got to be a dodgy stock to think about buying now, right?
I don’t think so, partly beacause of the stock valuation. Forecast earnings growth for the next few years is modest. But it puts the forward P/E at only 10 and falling.
The forecast annual dividend looks reasonable at 4.4%. But the cherry has to be special dividends. Specials are even less guaranteed than ordinary dividends — that is, not at all. But the company has been doubling its total payouts in recent years with specials.
The main risk I see is that the share price could slump if that trend falters. But if it continues, B&M would be worth a closer look for long-term income.
