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I have been along the FTSE 100 again FTSE 250 on the best stocks to buy today. Here are two that I think deserve serious consideration from the get-go again income investors.
JD Sports Fashion
JD Sports Fashion‘s (LSE:JD.) has been hit by weak retail conditions (particularly in North America) in recent times. But with interest rates falling, City traders think earnings are about to rise again.
An increase of 7% is proposed for the current fiscal year to January 2025. This improvement is 15% and 16% for fiscal years 2026 and 2027 respectively.
I am not alarmed by these bullish predictions. They also reflect the rapid growth in the athletic fashion market, a segment where JD is the market leader, and the company’s drive to expand globally.
This projection means the retailer, at 123p per share, trades on a forward earnings ratio (P/E) of just 9.7 times this year. This is well below the FTSE 100 average of 14.4. This reading drops to 8.5 and 7.3 times in fiscal 2026 and 2027 as well.
In addition, over the past two years, JD’s price-to-earnings (PEG) growth has fallen well below the 1-value watermark. These are 0.6 next year and 0.5 in the next financial period.
On the other hand, dividend yields are not very large. However, the prospect of rapid equity growth still makes JD an attractive income stock for me.
Its annual yield rose to 0.9% and 1.1% in the 2026 and 2027 financial years.
Ibstock
A number of UK stocks will benefit from the targets set in this week’s Budget. Infrastructure, renewable energy, defense stocks and health care, for example, could be big beneficiaries.
Home builders and suppliers of building materials can also emerge as winners. The government has pledged to spend more to meet its promise to build 300,000 new homes a year. This starts with a £5bn cash injection in 2025 alone, as announced in the Budget.
A brick maker Ibstock‘s (LSE:IBST) FTSE 250 company’s profits could rise on this backdrop. It should also gain momentum as the renovation and maintenance of Britain’s houses – reportedly the oldest in the world – continues apace.
Ibstock shares are not looking very cheap this financial year. At 205p per share, they trade on a P/E ratio of 26.3 times this year. However, this declines significantly over the next few years as income rises, to 19 in 2025 and 14.4 the following year.
City analysts expect earnings per share to reach 38% and 32% in 2025 and 2026 respectively.
Also, Ibstock’s PEG multiple is just 0.5 over the two years.
These bright forecasts also lead to strong profit growth forecasts. So the dividend yield on Ibstock shares goes from 2% this year to 2.7% and 3.5% in 2025 and 2026.
High interest rates are always a threat to business. But at current prices I think it’s worth a lot of attention, along with JD.
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