These FTSE 100 shares seem to offer exceptional value at first glance. Should I buy them for my shares portfolio?
Barclays in bother?
Today, Barclays (LSE: BARC) seems to offer brilliant all-round value for money. It trades on a price-to-earnings (P/E) ratio of 6.7 times for 2022 and boasts a meaty 4.6% dividend yield.
But I’m not prepared to take a gamble on the FTSE 100 firm as the British economy slows sharply. That’s even though the Bank of England (BoE) could boost the bank’s profits with several more interest rate rises next year.
It’s also important to remember that the BoE may lack the motivation to raise rates again soon. Even if inflation remains at elevated levels, the potentially-crushing effect of Omicron on British GDP may force the bank to stay its hand.
Earlier this month, the British Chambers of Commerce slashed its growth forecasts for the UK to 4.2%. That’s down a full percentage point from its prior forecasts, and was announced before fresh Covid-19 restrictions came into force. With infection rates rising again, it seems as if profits estimates for Barclays and its peers are in increasing danger.
The property powerhouse
Would I be better off buying Land Securities Group (LSE: LAND) shares instead? This UK share also offers plenty of bang for your buck, carrying a forward price-to-earnings growth (PEG) ratio of 0.5 and a 4.7% dividend yield. Fans of the predominantly commercial property owner would argue that its recent solid recovery should continue as it embarks on asset sales and acquisitions to rebalance its portfolio from at-risk sectors.
However, I’m not so convinced. Landsec’s only saving grace is its exposure to some residential property assets. I believe it stands to lose out as the growth of e-commerce batters physical retail, and the rise of homeworking reduces demand for office space. The FTSE 100 firm stands to fare particularly badly next year if the Omicron variant continues to spread and people stay at home in large numbers again.
6.9% dividend yields!
Truth be told, I’d much rather invest my hard-earned cash in Vodafone Group (LSE: VOD). I’m not going to suggest that this telecoms business doesn’t face risks of its own. The industry in which it operates is highly competitive and massively regulated, factors that pose enormous threats to future profits.
However, I think the benefits of me owning Vodafone outweigh the potential dangers. I like the huge amounts the FTSE 100 firm is investing in fast-growing 5G. I’m also encouraged by Vodafone’s African emerging markets, regions where demand for its telecoms and its mobile money services are booming as personal income levels there increase.
Today, Vodafone trades on what I consider an undemanding forward P/E ratio of 12.1 times. Though what really grabs my attention is the company’s juicy 6.9% dividend yield. I think this FTSE 100 share could make me buckets of cash in the years ahead.
The post 4.6%+ dividend yields! Should I buy these cheap FTSE 100 shares? appeared first on The Motley Fool UK.
Markets around the world are reeling from the coronavirus pandemic…
And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.
Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…
You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.
That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.
- Vodafone vs BT shares: which would I buy for 2022?
- Here’s why the Barclays share price could be set to soar
- 3 UK dividend shares to buy yielding 6%
- What’s going on with the Vodafone share price?
- 7%+ dividend yields! 5 FTSE 100 stocks to buy for 2022
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Landsec. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.