As we venture into this new month, the quest for the top FTSE 250 momentum shares to add to your portfolio continues. Allow me to present two options that have made a promising start in 2025.
- Clarkson
Riding on the wings of favorable trading reports early this year, Clarkson’s (LSE:CKN) shares have surged by a commendable 10.4% since the beginning of the year. Despite the looming threat of global trade tensions, this shipbroker still holds promise for further growth.
A recent update by Clarkson revealed that the company anticipates surpassing the current market expectations for full-year underlying profits. Factors contributing to the firm’s success include robust sale and purchase activities in both newbuild and second-hand markets, as well as resilient charter rates.
With supply constraints persisting, the short-to-medium term outlook for charter rates remains sturdy. Investors with a patient outlook might find investing in Clarkson appealing. While economic downturns may cause some turbulence in share prices, a long-term perspective suggests growth potential, driven by the structural opportunity presented by the increasing global trade dynamics.
Priced at £43 per share, Clarkson has nearly doubled its share value over the past decade alone. Furthermore, the company’s consistent dedication to increasing dividends proves to be an added advantage for investors. The 2.6% dividend yield projected for 2025 follows 21 consecutive years of dividend growth, a trend that is likely to continue.
Clarkson shares currently trade at a forward price-to-earnings (P/E) ratio of 15.5, which may not seem undervalued on paper. However, considering the company’s prominent position in a thriving market, this valuation appears justified.
- Babcock International
In the realm of defense and engineering services, Babcock International (LSE:BAB) has seen a rise in its value this year, with shares up by 8% to 545p since the start of 2025. Catering to armed forces across the globe, Babcock’s services have witnessed a surge in demand since the outbreak of conflict in Eastern Europe in 2022.
Recent financial results indicated an 11% increase in revenues between April and September, reflecting the company’s growth trajectory. With a complex geopolitical landscape and the return of Donald Trump to the US Presidency, Babcock stands to benefit from escalating defense spending.
Trump’s call for NATO nations to increase defense expenditure to 5% of their GDP could potentially drive further growth for Babcock. Additionally, the company’s services extend to NATO members such as Canada and France, presenting a broader market opportunity.
Although cost overruns pose a risk, as evidenced by a £90m charge incurred last year, the strong demand outlook positions Babcock as an attractive investment option. With a low price-to-earnings growth (PEG) ratio of 0.3, value investors may find Babcock particularly appealing.
In conclusion, both Clarkson and Babcock present compelling investment opportunities in the FTSE 250 space this month. Consider the growth potential and market dynamics of these companies as you navigate the investment landscape in 2025.
