Want to get rich? 3 FTSE 250 growth stocks that I’d buy and hold for the next 10 years

These growth giants from the FTSE 250 (INDEXFTSE: MCX) look set to thrive through the next 10 years at least, argues Royston Wild.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Dechra Pharmaceuticals (LSE: DPH) has all the tools to continue delivering stunning earnings growth over the next decade, at least.

The business of developing medicines for livestock and companion animals is becoming an ever-more lucrative one, and Dechra’s latest set of financials underlined the exceptional profits potential here. Net revenues leapt 18% between July and December at constant currencies, the FTSE 250 firm advised, the strength of its drugs pipeline helping sales to grow beyond the broader market, too.

What’s more, Dechra continues to build its pipeline (as well as its global footprint) to keep the top line roaring higher through shrewd M&A action. In December, it snapped up Brazilian pharmaceuticals giant Venco, a major player in the country’s gigantic food animal product market.

It’s not surprising, then, that City analysts expect earnings to rattle 13% higher in the year to June 2019, and by an extra 15% the following year. In my opinion, the company’s exceptional growth record and market-leading product stable makes it worthy of a high forward P/E ratio of 26.7 times.

Ring the bells

A more attractive pick for cash-strapped investors may be Bellway (LSE: BWY), though, the house-builder dealing on a bargain-basement prospective P/E multiple of just 6.7 times.

Don’t, however, take this low valuation as a sign of weakness. Sure, the stratospheric property price growth may be behind us, something which brokers believe will slow profits expansion at the builder to 2% in the years to July 2019 and 2020.

But the robustness of the UK housing market, supported by increasingly-generous mortgage packages and an inadequate number of new homesteads entering the market, means that Bellway should keep its long-running growth record motoring along nicely. Just this week, Lloyds unveiled its 100% mortgage product, for example, requiring no deposit at all from borrowers in the latest leg of the ongoing ‘mortgage deal wars’.

Continental colossus

B&M European Value Retail (LSE: BME) is another great growth share that I’m tipping to thrive over the next decade.

The cut-price retailers may not have had the best of it in November as sales slowed, but this proved to be a temporary problem, B&M advising this month that it enjoyed a “pleasing finish” in the three months to December. This doesn’t shock me in the slightest as you’d expect its value products to fly off the shelves in tough times for shoppers such as these.

That said, as the rampant influence of Aldi and Lidl on the global stage has already shown, consumers, both in the UK and beyond, have become increasingly accustomed to squeezing every last ounce of value out of their shopping trips. And by expanding across its home territory, as well as in Germany, B&M is positioning itself to exploit this phenomenon across the continent.

City analysts expect the firm to follow a predicted 3% earnings rise in the year ending March, with an even-better 15% increase in fiscal 2020. A forward P/E ratio of 16.5 times is, in my opinion, an attractive valuation, given the prospect of brilliant earnings growth at B&M in the medium term and most probably well into the 2020s.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of B&M European Value. The Motley Fool UK has recommended Lloyds Banking Group. 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.

More on Investing Articles

Google office headquarters
Investing Articles

1 reason I like buying S&P 500 shares – and 1 reason I don’t

Will this investor try to improve his potential returns by focusing more on S&P 500 shares instead of British ones?…

Read more »

Young woman holding up three fingers
Investing Articles

3 SIPP mistakes to avoid

Our writer explains a trio of potentially costly errors he tries to avoid making when investing his SIPP, on an…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Here’s how (and why) I’d start buying shares with £25 a week

Our writer uses his investment experience and current approach to explain how he would start buying shares on a limited…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s my 5-step approach to earning passive income of £500 a month

Christopher Ruane explains the handful of steps he uses to target hundreds of pounds in passive income each month.

Read more »

Investing Articles

2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the…

Read more »

Investing Articles

A lifelong second income for just £10 a week? Here’s how!

With a simple, structured approach to buying blue-chip dividend shares at attractive prices, our writer's building a second income for…

Read more »

Investing Articles

Here’s how I’d use a £20k Stocks and Shares ISA to help build generational wealth

Discover how our writer would aim to turn a £20k Stocks and Shares ISA into a sizeable nest egg by…

Read more »

Investing Articles

Billionaire Warren Buffett just bought shares of Domino’s Pizza. Should I grab a slice?

Our writer takes a look at a few reasons why Domino's Pizza stock might have appealed to Warren Buffett's Berkshire…

Read more »