Looking for the best FTSE 250 bargain shares to buy? You’re in luck, as recent stock market volatility leaves plenty of quality stocks with rock-bottom valuations.
Yet the FTSE 250 index of growth shares isn’t just packed with companies that look cheap based on expected earnings. Many also have huge dividend yields that would put most FTSE 100 income-paying shares to shame.
Here, I’ll reveal one of my favourites, and explain why it’s on my own watchlist for when I next have cash to invest.
Emerging markets star
Emerging market companies like TBC Bank (LSE:TBCG) face an increasing threat following conflict in the Middle East. Why? These regions depend more heavily on non-bank investment for growth. And with interest rates tipped to rise, funding from institutional investors could dry up.
That’s not just my opinion. The International Monetary Fund (IMF) made this warning on Tuesday (7 April), noting that “portfolio flows to emerging markets tend to be more volatile than bank flows and are increasingly sensitive to global risk conditions“. For TBC, which provides banking services in Georgia and to a lesser extent Uzbekistan, this poses an enormous threat.
Higher interest rates in Georgia would be good for TBC’s margins. However, their impact on local loan impairments and banking product demand — combined with the possibility of that sinking overseas investment — could create a huge net negative for earnings.
Yet from an investment perspective, I feel these problems are more than baked into the bank’s low valuation. Right now it trades on a forward price-to-earnings (P/E) ratio of 5.9 times. With a 6% dividend yield for 2026, too, I think it could be one of the best FTSE 250 value shares to consider.
17.9% annual returns
Georgia’s economy has faced challenges before. But over the long term, it’s delivered spectacular GDP growth that’s powered financial services demand, typically 5%-6% over the last decade.
As the country’s largest bank, TBC’s been in the box seat to exploit this opportunity. And it’s done so spectacularly, growing its share price 276% since it listed on the London stock market in August 2016 as profits have soared.
With dividends combined, the total shareholder return comes in at 392%, representing an average annual return of 17.9%. That’s more than three times the broader FTSE 250’s average yearly return of 5.2%.
A FTSE 250 dip buy?
Ultimately, I believe TBC Bank’s long-term outlook remains intact. And given the company’s super-low valuation today, I think it’s a top share to consider on the dip.
Net profits clocked in at roughly $531m last year, and TBC’s set a profit target of $1bn by 2030. Given its strong structural opportunities, it’s a goal I expect it to steadily move towards, driving the share price to new peaks.
