2 cheap FTSE 250 shares to buy

I’ve been looking for cheap FTSE 250 shares to buy for my portfolio recently. And I’ve been focusing on the construction and engineering sectors because a tremendous amount of cash is flowing into these markets as the UK government encourages building after the pandemic. 

Owning infrastructure assets could also be one of the best ways to protect my portfolio against the scourge of inflation. 

With that in mind, here are two FTSE 250 stocks I’d buy today, based on the above. 

Shares to buy for growth

The first company on my list is construction group Balfour Beatty (LSE: BBY). 2020 was a year this company would rather forget. The good news is, 2021 started with a bang. Interim pre-tax profit for the six months to the beginning of July totalled £35m, compared to a loss of £26m a year ago, as revenue edged up 1% to £4.15bn.

Thanks to these positive results, management announced a 3p per share dividend, up 43% from the pre-pandemic payout for 2019.

Going forward, the company has decided to ignore fixed-price private sector contracts, as these no longer generate the desired return. Instead, the group will focus on its bread-and-butter construction, which it believes will lead to higher profit margins. 

City analysts seem to agree. Following this change in strategy, one group of analysts hiked their price target for the company to 390p. 

Despite the City’s optimism, I should point out that construction is a volatile and low margin business. It’s usually the first to suffer in any economic downturn. Therefore, this organisation may not be suitable for all investors. 

However, considering the FTSE 250 stock’s potential, low valuation, and general outlook for the UK construction sector, I’d buy the shares for my portfolio today. 

FTSE 250 infrastructure

Infrastructure assets can be the best investments to own in an inflationary environment. That’s why I’d buy FTSE 250 stock 3i Infrastructure (LSE: 3IN) for my portfolio today. 

According to its latest results release, 3i’s net asset value was 268p at the end of March. With the stock trading at 310p, it would appear as if the shares are expensive, compared to the value of the group’s assets. 

However, I don’t think that’s the case. 3i has recently made several new investments, including the sale of Oystercatcher’s four European terminals, which weren’t reflected in the asset value.

At the same time, the company is always on the lookout for new investments, which it can usually acquire at favourable valuations, considering its reputation. 

That said, there will always be a risk the company will make bad investments. This will have a negative impact on the net asset value. It also uses debt to increase returns. As such, higher interest rates could impact profits. 

Despite these risks and challenges, I’d buy this company for my portfolio today, considering its low valuation compared to its growth potential.