2 dirt-cheap FTSE 100 shares I’ve bought during the market correction!

Stock market corrections provide opportunities to buy top-quality stocks for very little money. I think these cheap FTSE 100 shares are too good to miss.

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Earnings multiples have plummeted, due to recent stock market volatility. Dividend yields have at the same time shot through the roof. The FTSE 100 alone is awash with shares that offer spectacular value and I’ve been off shopping to capitalise on this.

The current market correction may have further to run. But timing the bottom is pretty much impossible during any volatile period.

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All I know is that stacks of top stocks look exceptionally cheap at recent levels. And as someone who invests for the long term, I’m happy to be patient and wait for them to rebound.

Here are two bargain FTSE 100 shares I’ve bought on the dip. Each carries a dividend yield above 10%.

Persimmon

I decided to buy Persimmon (LSE: PSN) shares because of its excellent all-round value. Today, it trades on a forward P/E ratio of 7.4 times and sports an 12.8% dividend yield.

I already own FTSE 100 shares Barratt and Taylor Wimpey. By investing in Persimmon I’ve boosted my exposure to what I consider to be a very bright industry. And what’s more, buying Persimmon means I now own the biggest-yielding UK housebuilding share out there.

I believe these shares continue to make enormous profits as Britain’s homes shortage drags on. More specifically, I expect demand for newbuild homes to keep surging as government fails to keep up with demand. Last year 180,810 new homes were built in England, according to property business Unlatch. This lagged government targets by almost 120,000.

Rising interest rates pose a threat to Persimmon. Rightmove says buyer demand was 113% higher last month than the pre-pandemic five-year average in May. However, it warns that affordability issues will impact market behaviour in the coming months.

Still, I believe this threat is more than reflected in Persimmon’s rock-bottom valuation. Over the long term I think the company’s share price could soar from current levels.

Rio Tinto

I think the same can be said for Rio Tinto (LSE: RIO). I reckon the diversified miner could rocket in value once the global economy bounces back.

Commodities companies are highly cyclical and the prices for their products can decline sharply during bad times. Just this week, copper values slumped to their cheapest for 2022 as recessionary fears grew, putting more pressure on miners’ share prices.

I still bought Rio Tinto despite this risk. I predict its earnings will rise strongly over the course of the decade as demand for its raw materials takes off.

For example, I expect sales of its iron ore — the material from which it makes almost three-quarters of profits — to soar as infrastructure and urbanisation spending increases. I also reckon its copper demand will increase sharply over the next decade as green technology adoption (electric cars and renewable energy) grows.

Rio Tinto P/E ratio of 5.1 times, and its 14.1% dividend yield for 2022, were too good for me to ignore. And I’m not done yet. There are other bargain stocks I’m thinking of adding to my portfolio today.

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