Grainger, Rathbones and Hollywood Bowl Lead Ftse 250 Value Picks
Grainger, Rathbones and Hollywood Bowl have been singled out as cheap ftse 250 opportunities even after the index rose 12% over the last year. Their appeal is simple: each combines a listed valuation measure with a dividend yield above 4%.
Grainger trades on 9.4 times earnings and now offers a 5.3% dividend yield. That came alongside like-for-like rents rising 3.1% in October-March and occupancy holding at 96%, giving income investors a business that kept collecting rent while paying out more cash.
Grainger and the 90% payout rule
Grainger is a residential rentals company and a REIT, which must pay out 90% of rental profits to shareholders. For investors, that helps explain why the stock can screen as both a growth and income name: rent growth and a high payout policy are working at the same time.
The catch is valuation discipline. A 9.4 times earnings multiple is not expensive by market standards, but it also leaves less room for disappointment if rent growth slows or occupancy slips from 96%.
Rathbones after Investec Wealth & Investment
Rathbones carries a P/E-to-growth ratio of 0.4 and a 5.4% dividend yield. It also acquired Investec Wealth & Investment in 2024, expanding its scale just as it pitched demand for advice around a projected £5.5trn in intergenerational wealth transfer over the next 25 years, combined with an ageing population and rising financial complexity, continues to drive long-term demand for professional advice.
That combination makes the stock look cheaper than a pure income play. A PEG ratio of 0.4 implies the market is paying less than one unit of earnings multiple for each unit of growth, which is the kind of setup value investors usually search for in asset managers with recurring client flows.
Hollywood Bowl’s 4.7% yield
Hollywood Bowl posted sales up 9.5% in October-March and adjusted pre-tax profit up 8.1% over the same period. Its PEG ratio stands at 0.9, and its dividend yield is 4.7%, giving investors both operating growth and a cash return profile that sits above the broad UK market.
The shares surged after a latest trading update in late May, but the valuation case still rests on whether those profit gains hold as the company expands in Canada and invests in amusements. If that trading strength continues, the stock keeps its place on a list built around yield, growth and a lower starting valuation.
