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There are a lot of FTSE 250 stocks that look interesting to me right now. From tech names to real estate investment trusts (REITs), I’m seeing many opportunities.
However, there’s one stock, in particular, that has caught my eye. This stock has almost everything I look for as a long-term investor and I think it could be one of the best stocks in the index to consider at the moment
A FTSE 250 star
The stock in focus today is IG Group (LSE: IGG). It’s a leading financial company that offers trading and investment platforms.
It currently trades for 1,140p and has a market cap of £3.95bn. That makes it the fifth-largest company in the FTSE 250 index at present.
A lot to like
So, why am I so excited about this mid-cap stock? There are a few reasons.
For starters, there’s the backdrop. While Donald Trump is in the White House, the stock market is likely to be volatile (we’ve already seen a ton of volatility this year). This company is very well positioned to capitalise on any market volatility because it offers trading solutions. Note that in July, full-year profit for FY2025 (the year ended 31 May) was well ahead of estimates.
Secondly, there’s a low valuation. For the current financial year, earnings per share are projected to come in at 110p. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of just 10.4. That earnings multiple is well below the FTSE 250 average and I think there’s scope for a decent upward re-rating at some stage.
We also have an attractive level of dividend income. Currently, the prospective yield here is about 4.3%, so investors potentially have multiple sources of return. Note that IG Group is operating share buybacks as well. These could help to boost earnings per share (and the share price).
Finally, the stock is in a beautiful uptrend. So, it has what analysts call ‘momentum’. This shouldn’t be ignored. Often, trends can stay in place for a while.
The potential for attractive returns
Of course, it’s not perfect. As with every stock, there are risks here.
A key risk is competition from rivals. Today, trading and investing is a very competitive industry.
Competitors to look out for include the likes of Robinhood and Trading 212. I’ll point out that IG’s move to buy Freetrade could help to fend off competition.
Another risk is a period of quietness (and less trading activity) in the markets. I’m not expecting this scenario while Trump is in power, but it is a possibility.
Overall though, I think this stock has a lot of appeal today and is worth considering. In my view, it has the potential to provide attractive returns (both share price gains and dividends) in the years ahead.
