Legal & General Group (LSE: LGEN) is a FTSE 100 share that currently offers exceptional all-round value. The financial services giant changes hands on an ultra-low price-to-earnings (P/E) ratio of 9 times for 2020. It sports a terrific 6.6% dividend yield for this year too.
People are becoming savvier with their money, and this bodes well for Legal & General’s investment services business. Things look good on a long-term basis for the firm’s retirement solutions operations as well as populations in its markets steadily age.
L&G has plenty of competition to see off in order to make the most of these opportunities however. The likes of Aviva, Royal London and Scottish Widows — along with a gigantic selection of smaller operators — are all vying for the same customers as this FTSE 100 firm. It’s important to remember that this could affect earnings growth.
Don’t bank on it
The NatWest Group (LSE: NWG) also offers tremendous value on paper. Not only does the FTSE 100 bank trade bang on a bargain forward P/E ratio of 10 times, but this blue-chip also carries a meaty 4.1% dividend yield.
Still, in my opinion, the company’s cheapness represents its risky profits picture. I recently said how bearish comments from the Bank of England in recent days were a worrying signal for the banks.
The British Retail Consortium has since echoed Threadneedle Street’s warnings with predictions that GDP growth will decelerate to 2.8% and 1.6% in quarters three and four respectively. This compares with the near-5% rise recorded in the second quarter of the 2021.
Rising Covid-19 infection rates, worsening supply chain problems, and signs of Brexit-related stress all cast a shadow over the economic outlook. And these naturally pose big threats to NatWest’s profits. I’m avoiding the bank despite the boost that share buybacks could give to its share price.
A FTSE 100 share I already own!
I’d much rather buy Ashtead Group (LSE: AHT) shares for my portfolio. In fact, I already own the construction equipment rentals business in my Stocks and Shares ISA. And I’m thinking of buying more to ride the economic recovery.
It’s true that some UK share investors could consider this FTSE 100 stock a risk too far. Ashtead sources around 80% of all revenues from the US, a market where construction news has been less than reassuring of late.
Home starts in the States slumped 7% month-on-month in July, a recent report showed. It could be argued that this slowdown illustrates an economy some believe is slowing sharply.
As a long-term investor though, I’m very excited by the shareholder profits Ashtead could make me. The company has spent heavily over the past decade to boost its market share and, at 11%, this is fractionally behind leader United Rental’s 14% share.
Ashtead has plenty of financial clout to continue building its slice of the pie too. This should allow it to win plenty of business as the construction market, boosted by the huge post-pandemic US infrastructure plan, grows strongly over the next decade.
