Two FTSE 250 growth stocks I’d buy before it’s too late

These two FTSE 250 (INDEXFTSE:MCX) companies could be worth buying right now.

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In the last year, the FTSE 100 has outperformed the FTSE 250 by around 8%. Much of this is because of the former’s focus on international companies. They have generally benefitted from rising valuations as sterling has weakened, while many mid-cap shares are more UK-focused. Since Brexit means economic uncertainty, it is unsurprising that large-cap shares have outperformed their smaller peers.

This means there may be bargains on offer within the FTSE 250. Here are two growth stocks which may not remain at relatively cheap prices indefinitely.

Healthcare potential

Demand for healthcare products and services is likely to rise rapidly in future years. The world’s population is not only increasing, it is also ageing. Therefore, investor sentiment towards the healthcare sector could improve over the long run. And since it is generally less positively correlated to the wider economy than most sectors, it could also provide a degree of stability and diversification in case the outlook for the global economy deteriorates.

Should you invest £1,000 in Unite Group Plc 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 Unite Group Plc made the list?

See the 6 stocks

Within the healthcare sector, interventional medicine specialist BTG (LSE: BTG) could deliver high returns. It is forecast to record a rise in its bottom line of 49% next year, followed by growth of 15% in the following year. Despite this, it trades on a price-to-earnings (P/E) ratio of 27, which puts it on a price-to-earnings growth (PEG) ratio of just 0.8. This indicates that it offers a sufficiently wide margin of safety to merit investment at the present time.

Certainly, BTG’s income appeal is non-existent right now, since it pays no dividend. However, as the company matures it is likely to begin to pay out a proportion of profit to shareholders. This could act as an additional catalyst on its shares and signal confidence in its long-term outlook.

Property potential

Rises in tuition fees do not appear to have reduced demand for university places. In 2015, it reached its highest recorded figure in history, with 532,300 people entering higher education in the UK. Given the pressure on housing in the general UK population, it is unsurprising that the provision of student accommodation has proved to be a profitable endeavour for companies such as Unite Group (LSE: UTG).

It has recorded double-digit growth in each of the last five years. Not only does this mark it out as an impressive growth play, it also signals that the company offers defensive characteristics. They could prove useful if Brexit equates to even greater uncertainty among investors.

Looking ahead, Unite is expected to record a rise in its bottom line of 9% this year and 16% next year. Its shares may trade on a P/E ratio of 20.7, but their PEG ratio of just 1.7 indicates that they offer good value when their relatively low risk profile is taken into account. Furthermore, Unite currently yields 3.5% from a dividend which is covered 1.4 times by profit. Therefore, as well as being an attractive growth stock, it continues to offer above-average income prospects.

Pound coins for sale — 31 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended BTG. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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