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Unlike the FTSE 100, the FTSE 250 is still some way off setting a new record high. But a few of its members aren’t hanging around.
Perfect mix
Financial trading platform provider IG Group (LSE: IGG) is one example. As I type (on 24 July), its shares are up 14% in 2025 and are now the most expensive they’ve ever been.
I’ve long appreciated this stock for many reasons, ranging from its consistent dividends to the chunky margins. But IG’s biggest draw is arguably that it makes more money when markets are volatile, giving it a defensive feel when everything else is going to hell in a hand cart.
Today’s full-year numbers back this up. Thanks to many events, including April’s tariff tantrum, IG revealed a 9% rise in revenue to nearly £1.08bn and adjusted pre-tax profit of £535.8m. The latter was well ahead of expectations (£523.5m).
Still cheap?
At the time of writing, the shares trade on a price-to-earnings (P/E) ratio of just 10. That looks cheap relative to how well things have been going and how robust its finances look.
Then again, there are a few risks to be aware of. Perhaps the most prominent is the threat of ongoing regulation. Protecting clients is never a bad thing in my book. But any sudden and unexpected new rules could conceivably bring IG’s share price crashing down.
Despite being the OG in this space, the company can’t rest on its laurels either. New rivals wanting a piece of the pie are constantly emerging.
So long as these risks are appreciated, however, I still see this as an excellent candidate to consider for a portfolio focused on generating both income and growth.
Record quarter
Another mid-cap stock whose share price is entering previously unchartered territory is Stocks and Shares ISA and SIPP provider AJ Bell (LSE: AJB).
Like IG Group, it also just provided a very solid update to the market.
Customer numbers rose by 27,000 in the three months to the end of June with the total number of clients coming in at 620,000. That’s a 17% increase on one year ago. The firm also reported its biggest ever net inflows, “reflecting a continuation of the strong momentum reported in the previous quarter“.
Expensive but…
With a P/E of 21, AJ Bell shares are pretty dear relative to its index peer. That’s despite the Salford-based business facing many of the same hurdles, such as the constant competition for clients and regulatory pressures.
As well as being probably more vulnerable to drops in general market sentiment, the £2.1bn cap also faces the challenge of getting more younger people involved in investing at a time when the cost of living is already prohibitive.
Still, the huge operating margins and returns on capital made to date go some way to justifying this premium. Its brand is strong and trusted too.
The 2.7% dividend yield, while below the FTSE 250 average, is decent for a growing company. Payouts have also been consistently hiked every year since it listed in 2018. To me, that signifies a business in rude health.
I wouldn’t feel comfortable betting the house here. But as part of a suitably diversified portfolio, I definitely think it warrants attention.
