After a rip-roaring start to 2019, the FTSE 250’s taken a step back to breathe. It’s down 3% from the highs for the year recorded in late April. And with trade wars, Brexit, and political stress in the Middle East all on the stove, it’s possible some extra weakness could be around the corner.
That said, don’t be put off from jumping in and grabbing a slice of something, I say. The same could have been said at the end of 2018 when the prospect of Federal Reserve rate hikes were doing the rounds.
There’s a galaxy of lovely stocks trading at low prices just waiting to be snapped up. In fact, there’s many FTSE 250 contenders I for one would be happy to buy today and hold for the rest of my life.
A fortune builder
Let me bring Ibstock (LSE: IBST) to your attention. It’s a share I actually own and was encouraged to buy on account of the size of the UK’s colossal homes shortage plus the many, many years of intense building that’ll likely be required to soothe it.
This supply/demand discrepancy is giving homebuilders the confidence to keep boosting construction rates and this is keeping sales of Ibstock’s bricks chugging higher.
It’s no wonder, then, the FTSE 250 firm declared in May it had made a “solid start to 2019” and that “underlying market conditions remaining stable despite ongoing political and economic uncertainty in the UK.”
If it can thrive in times like these, where Brexit is playing havoc with the UK economy on a scale not seen for decades, I feel it can survive just about anything.
City analysts do too, and they forecast that earnings will rise by double-digit percentages in 2019. A bargain-basement forward P/E ratio of 11.4 times fails to reflect this resilience, in my opinion, while a corresponding 5.9% dividend yield adds a brilliant sweetener to Ibstock’s investment case.
Fizzing up
Now I don’t hold Britvic (LSE: BVIC) at the moment, but I’m sorely tempted to load up on it. I’ve been a big fan of the soft drinks giant for many years on account of much-loved brands such as Robinsons, Lipton, Tango and Drench.
The company’s website proudly proclaims that “17,600 Britvic drinks are bought every minute” in its UK home market, and it’s managed to cultivate the success of its drinks portfolio through a steady stream of product innovations.
On top of this, the so-called sugar levy in the UK, brought in last April, has provided the firm with some welcome tailwinds too, underpinning demand for its low- and no-sugar brands such as Pepsi Max. This is another reason why revenues at the group rose 4.9% in the first six months of the fiscal year.
Just like clockwork, City analysts are expecting Britvic to put in another year of earnings and dividend growth in the current term. And this means the business boasts a cheap prospective P/E multiple of 15.3 times and a bulky 3.3% corresponding dividend yield.
Make no mistake, this drinks dynamo’s established brands aren’t going anywhere, and this makes it a brilliant share to hold for many years to come.