Don’t miss out on the stock market crash! I’d buy these cheap FTSE 100 shares

With the stock market crash offering an opportunity to investors, one Fool analyses 2 FTSE 100 shares perfect for the recovery.

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One of Warren Buffett’s most famous quotes is “be greedy when others are fearful”. As such, the recent stock market crash provides an ideal time to invest in cheap FTSE 100 shares. But just because many FTSE shares are currently cheap does not mean that they are worth buying. As a result, it is very important to be discerning when picking stocks. These two are my top picks.

A Footsie packaging and paper company

Mondi (LSE: MNDI) is a global packaging and paper group with a focus on sustainability. Whilst its operating profits have fallen 18% due to the pandemic, I still believe that it will recover well for two main reasons. Firstly, packaging is an increasing necessity in the current world due to the rise of e-commerce. This means that it will be well positioned to profit from the demand. The FTSE 100 share also has a strong focus on sustainability. With increasing global hostility towards plastic packaging, Mondi state that it uses “paper where possible, plastic when useful”. With a number of innovative products to achieve this aim, Mondi is in great shape to satisfy consumer demands.

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An attractive dividend yield of 5.6% is also very enticing. Although management has taken the decision to postpone this dividend, it has simply been done as part of “proactive measures to manage the current risk”. There is still an intention to pay it at some point if appropriate. This kind of prudence will ensure that the financial damage to Mondi is limited. For these reasons, Mondi is one of my favourite FTSE 100 shares.

This FTSE 100 share looks too cheap

The insurance company Aviva (LSE: AV) is the second Footsie stock that is simply too cheap. Insurance companies will be hit hard from the pandemic and Aviva will have to make big pay-outs. Nevertheless, it is in a very good position to absorb the losses due to around c.£18 billion in shareholders’ equity and significant reductions in debt over the past three years. With a price-to-book ratio of 0.5, this FTSE 100 share is also ridiculously cheap. This means that I rate Aviva as a solid long-term investment. 

Unfortunately, due to pressure from the UK’s financial regulator, Aviva has been forced into suspending its dividend. But with a strong balance sheet and good earnings over the past few years, this suspension should only be short term. This means that, at Aviva’s current bargain price, its future dividend should be yielding over 13%. For this reason, I would buy now whilst its cheap.

In conclusion, the stock market crash has provided a major opportunity to investors. I believe that these two FTSE 100 shares offer the perfect chance to make large returns in the future. Both have exercised caution within the crisis, and this will help mitigate losses. I’d certainly buy these cheap Footsie stocks today.

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Stuart Blair owns shares in Mondi and Aviva. The Motley Fool UK has no position in any of the shares mentioned. 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.

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