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September sell-off: 2 FTSE 100 stocks I think are too cheap to miss

Screen of price moves in the FTSE 100
Image source: Getty Images.

UK share markets have recovered robustly following the September sell-off of last week. The FTSE 100 has reclaimed the 7,000-point marker for instance and continues to chug higher.

But that doesn’t mean stock investors like me have missed the chance to go out and snap up some choice bargains.

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Indeed, I went dip buying following September’s mini stock market crash. I bulked up my holdings in veterinary services provider CVS Group and logistics giant Clipper Logistics. And I’m still scanning UK share markets for shares I think are too cheap to miss following the correction.

These FTSE 100 shares, for example, are still cheaper than they were at the start of the month. Oh, and they boast dividend yields that soar above the Footsie 3.4% forward average following the September sell-off. Here’s why I’d buy them for my stocks portfolio right now.

7.2% dividend yields

The Polymetal International (LSE: POLY) share price has fallen around 8% since the start of September, the gold miner unsurprisingly following the value of precious metals lower.

Usually demand for safe-haven gold jumps when macroeconomic worries (like those recent ones about China’s property sector) reach fever pitch. However, the commodity has fallen in recent weeks because of a rising US dollar. The resurgent buck makes it less cost-effective to buy dollar-denominated assets.

Sure, there’s a risk that Polymetal might continue to fall if the greenback keeps picking up traction. I’d argue that at current prices it could be one of the best-valued FTSE 100 stocks to buy. The miner trades on a forward price-to-earnings (P/E) ratio of 9 times and sports a 7.2% dividend yield.

I think Polymetal could bounce back as global inflation rockets, an historical driver of gold prices. And I reckon the UK share could deliver terrific long-term returns as it accelerates development of its world-class precious metal projects.

Hand holding pound notes

A FTSE 100 stock with double-digit yields!

BHP Group’s (LSE: BHP) another mining share that provide tremendous bang for a buck. The FTSE 100 firm trades on a forward P/E ratio of 7 times. It carries an even-mightier 11.2% dividend yield too!

BHP’s share price has slumped a whopping 16% since the start of September. This is perhaps no surprise as the risk to its earnings in the event of a property market collapse would be considerable.

The diversified miner sources around seven-tenths of underlying earnings from the sale of iron ore which is used to make steel.

I’d argue that BHP still looks attractive from a risk/reward perspective at current prices however. If a meltdown in China can be averted (progress on which has been made in recent hours) then the firm should make splendid profits from the broader economic recovery over the next few years at least.

And the long-term outlook for its metals like copper is tantalising as spending on green projects (like electric vehicles and renewable energy projects) takes off.

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Royston Wild owns shares of CVS Group and Clipper Logistics. The Motley Fool UK has recommended Clipper Logistics. 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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