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In recent years, economic and political uncertainty in Britain has hurt demand FTSE 250 shares. So even though it's still a year to date, the UK's second most respected stock index remains full of cheap stocks.
Investors have several tools to find value stocks. Two commonly used metrics are the price-to-earnings (P/E) ratio and the return-on-earnings ratio, which can be used to evaluate a stock's value relative to its growth and earnings prospects.
Using these indicators, I believe these two FTSE 250 stocks deserve serious consideration for value investors this month.
Renewables Infrastructure Group (TRIG)
Renewable Infrastructure Group (LSE:TRIG) share I hold in my portfolio. And to be honest, it turned out to be a disappointing investment for me because of the negative interest rate environment.
When prices rise, the income from a stock like this comes under pressure. Net asset values (NAVs) fall, and the cost of servicing their senior debt tends to rise.
The green energy producer is not out of the woods yet. A sudden rise in inflation may change the Bank of England's appetite to occasionally cut rates further.
However, I still believe that now would be a good time to consider buying. I am attracted to the cheapness of TRIG relative to the price of its goods. In accordance with Hargreaves Lansdownethe company trades at a discount of about 18% to its NAV per share.
The business also packs a dividend yield of 7.3% for 2024, which is more than double the FTSE 250 average of 3.3%.
This is an assignment I plan to hold for a long time. I expect wages (and thus dividends) to rise slightly over time as demand for clean energy heats up. And TRIG's broad European footprint and exposure to many types of renewable energy helps me spread risk effectively.
Hochschild Mining
Hochschild Mining's (LSE:HOC) is another FTSE 250 gainer worth keeping an eye on in October.
It may not offer the same dividend yield as TRIG. In fact, this remains at a useful-if-unsightly 0.9% in 2024.
But the gold and silver producer's P/E ratio of 8.8 times marks it as a bargain, in my book.
Hochschild shares rose in 2024 as precious metal prices rose. I don't think it's done either, given the bright view of these expensive goods.
Gold and silver prices should also benefit from lower interest rates and, by extension, profits for mining companies. Depreciation helps to maintain inflationary pressure.
On top of this, fears about the US and Chinese economies, coupled with escalating conflicts in the Middle East and Eastern Europe, may increase prices.
As a major silver producer, Hochschild may also benefit from increased industrial demand if the global economy enters a growth phase.
Potential production problems at its mines in The Americas are a potential threat to profitability. However, I still believe that the potential rewards of owning Hochschild shares may outweigh the risks. And especially if the company becomes a target for FTSE 250 peer acquisition Centamin.
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