One FTSE 250 stock that’s doing really well right now is industrial company Keller Group (LSE: KLR). Over the last year, it’s risen about 110%.

I still think the stock offers value though. Currently, it looks very cheap.

US success

Keller specialises in preparing ground to be built on. And right now, it’s having a lot of success, particularly in the US.

Across America today, demand for Keller’s services is high. This is due to the fact that the country’s spending a lot of money on infrastructure, onshoring, semiconductor plants, and data centres.

Strong H1 results

This success was reflected in Keller’s recent results for the half-year ended 30 June. For the period, the company reported:

• Underlying profit growth of 69%
• Underlying return on capital employed of 28.4% – the highest level for 15 years
• Free cash flow before interest and tax growth of 229%
• A 19% increase in dividend per share

Additionally, the company raised its guidance for the full year, saying it expects group performance to be “materially ahead” of market expectations. It noted here that performance should be underpinned by its record order book of £1.6bn.

Keller achieved outstanding results in the first half of the year, setting new records across the Group, as we continued to sustain and build on the material step-up in operational and financial performance delivered in 2023.

CEO Michael Speakman

Low valuation

Since these results, City analysts have naturally been raising their earnings forecasts for Keller. We may see more increases in the weeks and months ahead.

However, right now, the consensus earnings per share forecast for 2024 is 183p. That means that at today’s share price of 1,610p, the forward-looking price-to-earnings (P/E) ratio here is just 8.8.

That’s a low valuation. For reference, the median P/E ratio across the FTSE 250’s currently 13.4. So Keller trades at a large discount to the index.

It’s worth pointing out that analysts have been raising their price targets for the stock recently. On 6 September, for example, analysts at Berenberg increased their target price from 1,750p to 1,900p. That’s around 18% above the current share price.

Nice dividend

Yet potential share price gains aren’t the only appeal of this stock. It also offers a pretty decent dividend. For 2023, the company paid out 45.2p per share in dividends. This year, it expects to increase its payout by 5%. That would take the distribution to 47.5p. At today’s share price, that translates to a yield of just under 3%.

Worth a look?

Now, it’s worth pointing out that Keller operates in a cyclical industry. And an industry downturn’s a risk that can’t be ignored. Another risk is some profit taking in the short term. After all, this stock’s done very well recently.

All things considered, I think this stock has appeal. I reckon it’s worth considering today, particularly for those looking to diversify away from technology into other areas of the market.