The FTSE 250 is rebounding sharply. But it’s still possible for eagle-eyed investors to find excellent value shares.
Here are two I think savvy UK share investors should consider buying today.
7.2% dividend yield
Should you invest £1,000 in Associated British Foods right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Associated British Foods made the list?
Tritax Eurobox (LSE:EBOX) has soared as hopes of interest rate cuts have risen. Yet at 59.8p, the company – which owns and operates storage and distribution hubs — still looks cheap to me.
The property stock trades on a forward price-to-earnings (P/E) ratio of 13 times. This makes it cheaper than all of its UK-listed peers, as shown in the table below:
| Company | Forward P/E ratio |
|---|---|
| Tritax Big Box REIT | 19.3 times |
| Warehouse REIT | 14.3 times |
| Urban Logistics REIT | 15.5 times |
Meanwhile, the dividend yield for this year is 7.2%.
There are multiple reasons why I think Tritax Eurobox has a very bright future. Demand for logistics and warehousing space is tipped to soar in Europe for these reasons:
- Business are accelerating their reshoring and nearshoring initiatives
- Embracing new technological trends (like automation and robotics)
- Reconfiguring their supply chains following Covid-19
- Acquiring space to capitalise on the shift towards omnichannel retailing
This is all tipped to worsen the current property shortage in this market, pushing rent growth still higher. The firm’s own rents are on track to rise 3% to 5% in the current financial year.
Near-term earnings growth could be compromised if interest rates remain around current elevated levels. But on balance, I think the profits potential here is massive.
More spectacular value
When it comes to tremendous all-round value, I feel that Bluefield Solar Income Fund (LSE:BSIF) is hard to top. It trades on a forward P/E ratio of 9.9 times, suggesting — like Tritax Eurobox — that it’s very cheap in respect of predicted earnings.
On top of this, its dividend yield for this year is 8.3%, well ahead of the index’s 3.2% average.
Finally, Bluefield seems cheap to me when I look at the value of its asset portfolio. At 106.4p per share, it trades at a 21% discount to estimated net asset value (NAV) per share of 137.1p.
Building and maintaining green energy infrastructure requires vast amounts of capital. And so this renewable energy stock carries high levels of debt (£577m as of December).
But Bluefield’s strategic partnership with GLIL Infrastructure in late 2023 helps reduce this undeniable risk to investors. GLIL will acquire a 50% stake in a portfolio of more than 100MW of the firm’s assets as part of the deal.
The tie-up will also help Bluefield fund its development pipeline to drive future profits. It had 1.5GW of capacity in its project pipeline at the end of 2023, of which 93MW was under construction.
It’s also worth mentioning the company’s efforts to diversify its portfolio. Of that pipeline, a third is dedicated to battery storage, with the remainder earmarked for solar assets.
This helps the business de-risk its operations, while providing exposure to another rapidly growing industry.
The renewable energy sector is tipped for exponential growth over the next decade. And I think this UK share could be an excellent way for investors to capitalise.
