2 dirt-cheap FTSE 100 shares! Which should I buy in May?

The FTSE index is packed with top value stocks following recent market volatility. Are the following UK blue-chip shares too cheap for me to ignore?

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I’m hunting for the best-value FTSE 100 stocks to add to my portfolio in May. Here are two whose low earnings multiples have caught my eye.

International Consolidated Airlines

The post-pandemic travel surge shows no signs of slowing. Latest data from Europe’s busiest airport, Heathrow, showed that 16.9m passengers passed through its terminals in the first quarter. That was up 74% from the same period in 2022.

This resurgence in citizens’ wanderlust is clear in the trading reports of the world’s major airlines. Take International Consolidated Airlines (LSE:IAG), for example. The British Airways owner’s most recent release showed revenues up 80% in the final three months of last year. During that time, passenger numbers soared by almost two-thirds year on year.

Yet despite the steady stream of good news, I’m not buying IAG shares today. Not even the FTSE flyer’s low price-to-earnings (P/E) ratio of 8.9 times is enough to tempt me in.

I fear that the sustainability of the recent upbeat travel news is looking a tad fragile right now. The global economy is slowing, and high inflation could remain a sticky problem. In this landscape, plane ticket demand from both holidaymakers and business travellers might start to cool.

This is a problem for me when it comes to IAG too. That’s because of the company’s huge debt pile. Net debt has fallen over the past year, thanks to recovering passenger numbers. But at €10.4bn, it remains a big danger that could hamper its growth strategy and affect future dividends.

On top of this, IAG’s profits could be compromised by increasing costs. Rising labour-related expenses and increasing fuel costs as OPEC+ countries cut crude production are an extra worry for me.

WPP

The gloomy economic environment also poses a threat to WPP (LSE:WPP) in the short-to-medium term.

Marketing and advertising budgets are among the first things to be slashed when profits decline. And ad agencies like this could find generating sales increasingly difficult.

To underline this danger, a report from the World Federation of Advertisers shows that 29% of multinational companies plan to reduce ad spend in 2023.

But a bright long-term outlook means I’m still considering buying WPP for my portfolio. It has huge global scale and brand recognition that makes it a leading agency with blue-chip companies. This puts it in a great position to capitalise on the expanding world economy.

I also like the business because of its strong balance sheet. This is helping it to keep expanding its geographical footprint and boost its position in the fast-growing digital segment. The takeover of sonic branding firm amp last week is the latest in a string of acquisitions in early 2023.

Today, WPP’s shares trade on a forward-looking P/E ratio of 9.2 times. They also carry a 4.3% prospective dividend yield, ahead of the 3.5% average for FTSE 100 stocks.

On balance, I think the firm is a top FTSE bargain to buy next month.

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.

Royston Wild has no position in any of the shares mentioned. 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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