As stock markets slide lower, the bargains become bigger.
As the European Union delays its decision on the next installment of its bailout cash for Greece, following the country's announcement that it would not meet European targets for cutting its deficit this year or next, the FTSE continues to tumble for the fifth day in a row -- it's down another 3% as I write these words.
And some of our best-known shares have fallen with the market -- whether they have exposure to Greece or not. So which household names are among the casualties, and are they better value now?
Buy a bank?
One share that does have serious exposure to the European financial meltdown is Barclays (LSE: BARC), the bank that managed to weather the worst of the 2008 financial storm without needing any bailout from UK taxpayers.
It's not altogether wrong that banking shares should fall when the eurozone wobbles, but is the sell-off of Barclays overdone? My Foolish colleague Cliff D'Arcy seems to think so. And even after Tuesday's 6% fall to 145p, the price is still above the 139p that had Cliff salivating, so it looks like there's a recovery just fighting to get out.
With a P/E of around 5, and a dividend yield of nearly 4% forecast -- and that's expected to be around 5 times covered on current expectations -- it does seem like a poor European outcome is now factored in to the price.
A cheap miner
Lower commodity prices have depressed shares in the mining sector, as now even demand from China appears to be slowing down. But commodities, like fossil fuels, metals and minerals, are in finite supply, and long term the worldwide demand for them can only grow.
Back in August I pondered the question of why miners were so cheap, and Cliff looked at the mega-miners just a few days ago, pointing out that "the three lowest-rated, highest dividend-paying mining stocks in the FTSE 100 are BHP Billiton, Rio Tinto and Vedanta Resources".
And one of the biggest fallers on Tuesday was Rio Tinto (LSE: RIO), whose shares are currently 4% down, to £26, which is way below this year's high point of over £46. True, there's a relatively low dividend of less than 3% forecast, but it should be covered seven-fold, and the P/E is below 5.
Grease your palm?
The big oilies have fallen, too, with BP (LSE: BP) down 3.5%, and Royal Dutch Shell (LSE: RDSB) down 2.8% on Tuesday.
At 373p, BP forecasts suggest a dividend of 4.5% and a forward P/E of 5. For Shell, at 1,923p, the respective figures are 5.4% and 7.4.
Both look ludicrously cheap to me. But if I had to choose, I'd go for BP because the forecast dividend is far better covered than Shell's, as the former slowly gets back to decent payouts following the Gulf of Mexico disaster. Basically there seems more room for dividend growth than there is for Shell.
More from Alan Oscroft:
> Alan owns shares in BP
