The recent stock market mini-crash has provided a wealth of opportunities for value investors. On the growth-oriented FTSE 250 index of shares alone, dozens of great companies are now trading at rock-bottom prices.
Today I’m seeking the best stocks to buy with ultra-low price-to-earnings (P/E) ratios and enormous dividend yields. It’s a combination I think could deliver healthy capital gains as prices eventually correct, as well as the potential for a wealth-boosting passive income.
Here are three FTSE 250 bargains I think are worth serious consideration today.
Foresight Solar Fund
Renewable energy shares like Foresight Solar Fund (LSE:FSFL) can deliver disappointing returns during unfavourable weather conditions. The amount of power they have to sell can underwhelm when — in this particular case — the amount of solar radiation dips.
However, this particularly power generator has sought to mitigate this risk by placing its assets far and wide. Its solar farms traverse the length and breadth of the UK, and can also be found in the sunnier climes of Spain and Australia.
Largely speaking, I think Foresight’s a rock-solid share to buy in uncertain times. The stable nature of energy demand means revenues remain broadly constant regardless of macroeconomic and geopolitical risks. Its dividends are also linked to the rate of inflation.
Speaking of which, the company’s forward dividend yield is a huge 10%. It trades on a low P/E ratio of 9.6 times as well.
B&M European Value Retail
B&M European Value Retail (LSE:BME) is another FTSE 250 share offering excellent all-round value, in my view. It’s recent slump — which saw it duck out of the FTSE 100 back in December — means it trades on a forward P/E ratio of 8.1 times.
Meanwhile, the firm’s corresponding dividend yield is a huge 8.5%.
A string of disappointing trading releases shows that not even value-focused retailers are immune to broader pressure on consumer spending power. They remain in peril as long as the UK economy struggles for traction.
Yet I think long-term investors should consider taking a look at B&M at today’s price. The value sector is still tipped by industry analysts to grow strongly over the next decade. And the business is expanding rapidly in Britain and France to capitalise on this.
ITV
It could be argued that traditional broadcasters like ITV (LSE:ITV) are on shakier ground today. As streaming companies like Netflix and Amazon‘s Prime service take over, the role of the linear television is diminishing.
Yet it’s my view that ITV could thrive in this new landscape. The steady rise of its ITVX television-on-demand platform suggests the company knows how to thrive in the digital age. With 14.3m active users, it’s been the UK’s fastest-growing streaming platform over the last two years.
On top of this, the company’s sprawling production division leaves it well placed to capitalise on the streaming sector’s thirst for content. ITV Studios — which delivered record profits last year — is on course to deliver market-beating organic revenue growth between 2021 and 2026.
Today ITV trades on a forward P/E ratio of 8.3 times, and carries an 6.7% dividend yield. I think this is exceptional value for money.
