One FTSE 250 inventory that’s doing very well proper now could be industrial firm Keller Group (LSE: KLR). Over the past yr, it’s risen about 110%.

I nonetheless suppose the inventory presents worth although. At present, it appears to be like very low cost.

US success

Keller specialises in making ready floor to be constructed on. And proper now, it’s having plenty of success, notably within the US.

Throughout America in the present day, demand for Keller’s providers is excessive. This is because of the truth that the nation’s spending some huge cash on infrastructure, onshoring, semiconductor vegetation, and knowledge centres.

Sturdy H1 outcomes

This success was mirrored in Keller’s latest outcomes for the half-year ended 30 June. For the interval, the corporate reported:

• Underlying revenue progress of 69%
• Underlying return on capital employed of 28.4% – the very best stage for 15 years
• Free money movement earlier than curiosity and tax progress of 229%
• A 19% enhance in dividend per share

Moreover, the corporate raised its steering for the complete yr, saying it expects group efficiency to be “materially ahead” of market expectations. It famous right here that efficiency needs to be underpinned by its report order guide of £1.6bn.

Keller achieved excellent leads to the primary half of the yr, setting new information throughout the Group, as we continued to maintain and construct on the fabric step-up in operational and monetary efficiency delivered in 2023.

CEO Michael Speakman

Low valuation

Since these outcomes, Metropolis analysts have naturally been elevating their earnings forecasts for Keller. We might even see extra will increase within the weeks and months forward.

Nonetheless, proper now, the consensus earnings per share forecast for 2024 is 183p. That signifies that at in the present day’s share price of 1,610p, the forward-looking price-to-earnings (P/E) ratio right here is simply 8.8.

That’s a low valuation. For reference, the median P/E ratio throughout the FTSE 250’s at present 13.4. So Keller trades at a big low cost to the index.

It’s value declaring that analysts have been elevating their price targets for the inventory lately. On 6 September, for instance, analysts at Berenberg elevated their goal price from 1,750p to 1,900p. That’s round 18% above the present share price.

Good dividend

But potential share price good points aren’t the one attraction of this inventory. It additionally presents a reasonably first rate dividend. For 2023, the corporate paid out 45.2p per share in dividends. This yr, it expects to extend its payout by 5%. That will take the distribution to 47.5p. At in the present day’s share price, that interprets to a yield of just below 3%.

Value a glance?

Now, it’s value declaring that Keller operates in a cyclical business. And an business downturn’s a threat that may’t be ignored. One other threat is a few revenue taking within the quick time period. In spite of everything, this inventory’s completed very properly lately.

All issues thought-about, I believe this inventory has attraction. I reckon it’s value contemplating in the present day, notably for these seeking to diversify away from know-how into different areas of the market.