Companies in the FTSE 250 index have a more domestic focus and smaller market caps than their FTSE 100 counterparts. As we get ready to leave the general election discourse behind us, I believe investors can find both value and growth in the FTSE 250 index.
All three companies also have robust dividend yields. In general, investors regard solid dividend stocks as an important source of investment profits, especially in politically volatile times.
Bellway (LSE: BWY) is one the largest homebuilders in the country. It concentrates on building traditional family housing outside of London and apartments within the London boroughs. Bellway and Ashberry are the main brands it uses.
It is no secret that in the UK, the stock of housing is lagging behind demand. In early November, the group released its annual report and accounts for 2019 that pleased investors overall. Operating profit came in at £674.9m. During November, the stock went up over 5%. And year-to-date, BWY shares are up about 28%.
With a forward P/E of 8 and a dividend yield of 4.5%, the stock is likely to appeal to a wide range of investors. The shares are expected go ex-dividend in May 2020.
If you are an investor interested in buy-to-let property, you may consider buying this builder instead of a house to let.
PageGroup (LSE: PAGE), the global recruiter, operates in four core segments “across 25 disciplines from actuarial to technology.” It has significant exposure to the permanent placement market — a high-margin business.
Its business spans four regions, namely the UK, Europe-Middle East-Africa (EMEA), Asia-Pacific, and the Americas. The recruiter now focuses especially on growth countries where recruitments markets are less developed and hence competition is limited.
The recruitment industry is quite sensitive to macroeconomic conditions. Such cyclical companies tend to suffer on both the top and bottom lines in a downturn. In October, management released its third-quarter 2019 trading update. Although group gross profit was up 2.1%, the UK saw a decline of 4.1%. Since then, despite the downturn in its UK business, the PAGE stock price is up about 30%.
The group operates a cash-generative business with a current net cash position of £92m. Analysts agree that this is plenty of cash to both grow and return substantial amounts to shareholders in an asset-light industry such as recruiting.
The shares have a dividend yield of 2.8%. The company also has a history of paying special dividends.
With 122 stores nationwide and an additional two specialist business centres, as well as 34 more locations in Europe (including Paris), Safestore (LSE: SAFE) is the UK’s largest provider of self-storage.
The company, which puts its sites “close to where people live,” has a diverse range of customers. Nationwide, demand for storage space exceeds supply. And management has been successful in capitalising on the growth of self-storage for households and businesses.
Over the years, SAFE has mostly grown organically rather than pursuing acquisitions. The average occupancy is eight months.
The group has consistently produced consensus-beating results. In mid-November, it released a fourth-quarter trading update. Quarterly revenue came at £40.5m, compared to £38.3m a year ago. And during the 2019/220 financial year, management is on track to add new sites both in the UK and France.
Year-to-date, although the shares are up almost 50%, I’d regard any dip in the price as a chance to buy into the shares. The dividend yield stands at 2.2%.
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tezcang has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
Motley Fool UK 2019