2 FTSE 250 growth stocks I'd buy for an ISA today

Over the past decade, Diploma (LSE: DPLM) has quietly been one of the best performing mid-caps many investors may not have known about. The company, which provides a wide variety of specialised products over the life sciences, seals and controls sectors, has recorded annualised EPS growth of 14% and dividend growth of 16% over the period and pushed the stock well ahead of its FTSE 250 index.

And judging by the group's half-year trading update released this morning, this stellar performance still has room to run. During the period, revenues rose 12% on a constant currency basis thanks to organic growth of 7% and acquisitions adding 5%. While operating margins were broadly level during the six months there's still scope for full-year margins to improve due to major investments in working capital in H1.

This sort of performance is what the market has come to expect from Diploma and with a cash-heavy balance sheet providing plenty of funding for further acquisitions, I see reason for the group's GDP+ growth to continue. Also appealing is the group's focus on essential products like clinical diagnostic instruments and high-end fasteners for industrial applications that ensures a high amount of reliable sales throughout the business cycle.

There are changes ahead for Diploma as it welcomes a new CEO following the retirement of its long-serving leader following 20 years at the helm. However, the incoming CEO appears committed to the same strategy of organic growth and constant acquisitions that has helped turn Diploma into the stellar business it is today. While the group's shares are pricey at 21.6 times forward earnings, it's still one stock I'd happily hold in my retirement accounts for years to come.

A surprising growth star

Another mid-cap stock with a solid record of growth behind it that I'd happily own is WH Smith (LSE: SMWH). Although the newsagent hasn't substantially increased revenue over the past five years, this is something of an accomplishment due to the travails of high street retailers.

And while sales may have been flat recently, profits have been anything but. From 2013 to 2017, earnings per share leapt from 64p to 104p. That was thanks to good management of the high street business that's in steady decline but still profitable, as well as high investment in the fast-growing travel retail segment.

In 2017, 9% growth from the travel segment led total group revenue 2% higher year-on-year, despite a 5% drop in high street sales. Much the same happened with profits as management invested in opening new travel outlets at home and abroad.

Looking ahead, there's still huge potential for the travel business to grow as it only had 249 international outlets open as of January. We need look no further than the success of travel food outlet operator SSP Group, which is run by WH Smith's former CEO, to see how lucrative tapping into this market can be.

WH Smith's shares may be a bit highly valued at 17.5 times forward earnings, but the group's proven management team and high rollout potential make it one mid-cap growth star I'd own for the long term.

Capital Gains

In the meantime, one of our top investing analysts has put together a free report called "A Top Growth Share From The Motley Fool", featuring a mid-cap firm enjoying strong growth that looks set to continue. To find out its name and why we like it for free and without any obligations, click here now!

Ian Pierce has no position in any of the shares mentioned. The Motley Fool UK owns shares of SSP Group. The Motley Fool UK has recommended WH Smith. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.