I feel the FTSE 250 is residence to a few of the most enjoyable firms the UK has to supply and is a good place for buyers to go purchasing for shares.

Not like the FTSE 100, most of the companies on the index go underneath the radar. As such, I reckon it’s smarter to snap up these shares and maintain them for the long term.

One instance is Video games Workshop (LSE: GAW). I already personal shares within the miniature wargames producer. I feel buyers ought to contemplate shopping for it at the moment.

Beating the market

I can see why buyers wanting on the inventory’s efficiency up to now in 2024 might query if Video games Workshop is a brilliant funding. In any case, its share price is down 2.5% when the broader index has soared 5.6%.

However I don’t deal with short-term share price actions. Once I make investments, I do it with the larger image in thoughts. Each inventory I purchase, I intend to carry it for at the least 5 years. Ideally, it’ll be longer.

However how has Video games Workshop carried out over that timeframe? Effectively, over the past 5 years, its shares are up 115%. That’s an increase of 23% every year on common.

For comparability, the FTSE 250 has returned 7.8% over the identical interval, a mean of round 1.6% per 12 months.

What’s even higher is that return doesn’t issue within the inventory’s spectacular dividend yield. During the last 5 years, its common yield is 3.2%.

Which means a £10,000 funding within the inventory, assuming dividends had been reinvested alongside the way in which, could be price £23,233 at the moment. The identical funding within the FTSE 250 could be price £12,513.

Time to purchase?

So, is Video games Workshop too good to show down?

Effectively, doubtlessly. In fact, I need to make it clear that previous efficiency is in no way any indication of future potential good points. That stated, I’m bullish on the long-term outlook for the enterprise.

There are a couple of causes for this. Firstly, within the miniature wargames trade, Video games Workshop is the market chief with little competitors. This provides it a moat over its competitors. Which may be why it has skilled sturdy income development, averaging 16.7% over the past 5 years.

The enterprise has additionally proved its resilience in current occasions. For instance, even throughout a cost-of-living disaster, Video games Workshop posted a report income of £247.7m for the 26 weeks to 26 November 2023.  

The corporate has an extremely sturdy steadiness sheet with ample money and 0 debt. As such, it makes use of solely “truly surplus cash” to reward shareholders.

That’s why I just like the inventory as a passive revenue play. It at present yields 4.4%, increased than the FTSE 250 common (3.2%).

Not with out dangers

There are some dangers I see with the inventory. Trading on 22.7 occasions earnings, its shares look costly. That’s increased than the FTSE 250 common of round 12.

Whereas the enterprise has additionally posted spectacular development, I’m aware that given the present unsure financial setting, it may very well be hit with a slowdown in gross sales.

Paying the price

However I’m snug paying the price for high quality. And with Video games Workshop, I reckon I’m getting simply that. I already personal the shares, however would fortunately add extra to my portfolio if I had the money.