The FTSE 250 offers ISA investors a lot of options. With the index up nearly 8% so far in 2026, it’s on track for the second consecutive year of decent gains.

However, you don’t have to dig far to find low valuations and bumper dividend yields. Here’s a cheap FTSE 250 stock that I think has solid income and growth potential.

Under-the-radar financials stock

TP ICAP (LSE:TCAP) stock has quietly been heading higher without much fanfare. Since hitting a low of 105p in 2022, it’s bounced back strongly and currently trades above 300p.

I say quietly because TP ICAP doesn’t get a lot of coverage, despite having a £2.3bn market-cap (quite large for the FTSE 250). That’s probably because it’s a behind-the-scenes provider of financial markets infrastructure and data.

Specifically, TP ICAP acts as an intermediary for global over-the-counter (OTC) markets. Indeed, it’s the world’s largest interdealer broker, enabling investment banks and large asset managers to trade complex assets outside public exchanges.

Fund manager Nick Train has been buying its shares. He points out: “Because TP ICAP sees two out of every three trades in the OTC markets, its historical and up-to-the-minute data is superior to its competitors. As such, the company is a critical piece of global financial market infrastructure.”

Reflecting this, the first-half results were solid. Group revenue increased 8% at constant currency to £1.3bn, with adjusted operating profit up 9%. These figures are in line with medium-term targets to deliver mid-to-high single-digit revenue growth, with improving operating leverage.

Speaking of which, the company’s Parameta Solutions arm is worth highlighting. Launched in 2021, it’s a data and analytics division where 98% of the revenue is subscription-based and recurring. Parameta now makes up almost 10% of group revenue and its operating margin is more than double group-wide margins of 15%.

A couple of risks to be aware of

Now, while the higher-margin Parameta business is interesting, the bulk of revenue is still made through commissions and execution fees when clients trade. Therefore, a drop-off in trading volumes during quieter market periods is a key risk.

There’s also potential competition from pure electronic trading platforms (TP ICAP operates a hybrid broker model). That said, broker productivity (measured as average revenue per broker) has climbed consistently since 2021, so clearly the model’s valuable.

We are a leading global player in OTC markets, where there are no central exchanges. These markets are vast, complex, and expected to deliver long-term structural growth.

CEO Nicolas Breteau

The stock looks very cheap today

With analysts expecting earnings per share of 37.5 for next year, TP ICAP can be snapped up at a forward-looking price-to-earnings (P/E) ratio of just 8.5. Add in a forecast dividend yield of 6.2%, and this looks like great value to me.

Importantly, the dividend looks well-covered by expected earnings. As such, I think the stock’s worth considering for an ISA.

Looking ahead, the world’s likely to get more volatile (think geopolitics, record government debt, etc). That should result in more trading of more complex assets, supporting the liquidity specialist’s long-term growth trajectory.

Should you invest £5,000 in Tp Icap Group Plc right now?

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Ben McPoland has no position in any of the companies mentioned.