FTSE 100 shares are still cheap! 2 stocks on sale that I’d buy today

Many FTSE 100 shares still look cheap to me, despite the index hovering around 8,000 points. Here are two bargain stocks I’d buy now.

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FTSE 100 shares have been in a consistent uptrend since their mid-October lows. In February, London’s blue-chip index hit a fresh all-time high in perhaps the clearest sign yet that UK stocks are back in vogue.

However, the benchmark still looks undervalued compared to overseas indexes, particularly in the US. The FTSE 100’s forward 12-month price-to-earnings (P/E) ratio is 12.5 at present. By contrast, the S&P 500 has a P/E ratio of 18.1 and the Nasdaq Composite‘s is 14.6.

With that in mind, I’m going bargain hunting for cheap Footsie stocks. Here are two I’d buy today.

Hargreaves Lansdown

The Hargreaves Lansdown (LSE:HL.) share price has trailed the FTSE 100 this year to date, falling 3% against the index’s 5% rise.

However, with a forecast P/E ratio under 14 (which is well below what’s typical for this stock), I’m considering taking a position in the financial services company while its shares are in a slump.

Hargreaves Lansdown has established itself as a leading brand in the direct-to-investor market. It allows retail investors to buy a range of funds, stocks, bonds, ETFs, and other financial instruments.

The firm’s H1 results for 2023 contain some promising numbers. Revenue increased 20.2% to £350m and underlying pre-tax profit also climbed 29.6% to £211.9m. What’s more, the number of active customers rose by 31,000 to 1.77m. As an investor who prioritises passive income, I’m also pleased to see the company’s dividend per share rise to 12.7p from 12.26p in 2022.

This stock isn’t without risks. Hargreaves Lansdown cites low consumer and investor confidence as challenges, compounded by the inflationary environment. This could continue to impact on dealing volumes and limit share price growth.

Nonetheless, that’s a risk I’m prepared to take. If I had some spare cash, I’d invest in Hargreaves Lansdown shares today.

Mondi

The Mondi (LSE:MNDI) share price has also made a sluggish start to the year, falling 2%. The P/E ratio of just 6.4 looks tantalisingly low, however.

This company manufactures and sells packaging and paper products. These include corrugated cardboard and printing paper, as well as plastic and paper bags

Currently, shareholders benefit from a 4.5% dividend yield. That’s a whole percentage point above the average FTSE 100 yield of 3.5%. Mondi has been a consistent dividend payer for the past 15 years, which is encouraging considering several companies suspended their distributions during the pandemic.

The company’s full-year results for 2022 indicate financial strength. Underlying EBITDA rose 60% to €1.85bn and cash generated from the firm’s operations increased 29% to €1.3bn. Due to its high cash flow, dividend cover looks robust at around 2.4 times earnings.

Wood prices remain a challenge for the business. Sanctions have limited the supply of Russian and Belarusian timber in the market, and this has contributed to higher input costs. However, the company has a credible plan to offset these risks with additional investment in its pulp and paper mill in Finland.

Overall, Mondi shares look like a good long-term buy for me. The company has ambitious net zero targets that have received plaudits from sustainability organisations. Again, if I had cash to spare, I’d buy this stock now.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Charlie Carman has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown Plc. 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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