Could these under-the-radar FTSE 250 companies help you retire early?


The FTSE 250 index is flying at the moment, having surged around 30% since the Brexit sell-off just under a year ago. However, despite the significant gain, I reckon there's still plenty of value to be found in the mid-cap index. Here's a look at two stocks that I believe offer potential right now.

Polypipe Group

Polypipe Group(LSE: PLP) is a UK-based manufacturer of plastic piping systems and energy-efficient ventilation systems for the residential, commercial, civil and infrastructure sectors. With operations in the UK, Europe and the Middle East, Polypipe is diversified geographically and the company enjoys a strong reputation in a market that has high barriers to entry.

The piping specialist has been an outstanding performer in recent years, with revenue growing from £301m in FY2013 to £437m last year, a compound annual growth rate (CAGR) of 13.2%. Net profit in this time has increased from £20m to £44m and the company increased its dividend by a huge 30% last year to 10.1p per share, a signal of confidence from management. City analysts believe Polypipe's rise will continue this year, with revenue and earnings growth of 6% and 8% estimated. A dividend payout of 10.7p is also forecast, which would take the company's forward-looking yield to a robust 2.6%.

A trading update in late May was upbeat, with Chief Executive David Hall stating that the general economic environment "appears to be improving" and that Polypipe is "on track to achieve management expectations for the full year."

The stock has no doubt enjoyed a strong run over the last year, rising from 220p amid the Brexit panic to around 410p today. However on a forward P/E of 15.2, the stock doesn't look overly expensive in my view, given the growth generated in recent years.


Also exhibiting strong share price momentum at present is clay bricks and concrete manufacturer Ibstock(LSE: IBST), its shares rising over 100% since the Brexit turbulence last June.

The company has been another fantastic performer in recent years, with revenue increasing from £317m in FY2013 to £435m last year (11.1% CAGR) and net profit surging from £10m to £90m in that time. Analysts following the company have pencilled-in revenue of £466m for FY2017, and earnings per share of 18.8p, meaning that at the current share price of 250p, Ibstock trades on an undemanding P/E ratio of just 13.3.

Furthermore, not only does the valuation look attractive here, but Ibstock also looks to have appeal from a dividend perspective. Indeed, this year's consensus dividend payout estimate of 8.4p points to a forward yield of a healthy 3.4%, and the payout is expected to grow at a decent rate in the next few years.

The company stated in May that "market fundamentals in UK remain robust with the demand for new housing in particular continuing to underpin activity levels in both our clay and concrete businesses." As a result, despite the strong share price performance over the last year, I believe shares in Ibstock still offer value at the current share price.

Is this FTSE 250 stock a better investment opportunity now?

While I believe both Polypipe Group and Ibstock have fantastic potential, analysts at The Motley Fool reckon they've found an even better investment opportunity.

The stock is listed right here in the report A top growth stock.

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Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.