2 dirt-cheap FTSE shares I’d buy to hold until 2030

Christopher Ruane identifies a pair of FTSE 100 shares he thinks have bargain prices considering how he sees their prospects for the years ahead.

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As a long-term investor, I like to buy and hold shares for years or even decades. Blue-chip FTSE 100 and FTSE 250 shares do not always come at a price that I am willing to pay for them, however.

Right now, though, there are a couple of such shares that look dirt-cheap to me. If I had spare cash to invest, I would happily buy them with a plan to hold them until 2030 or beyond.

JD Sports Fashion

My first choice is JD Sports Fashion (LSE: JD.).

The company has developed a simple but powerful model of selling sports and casualwear. It has a powerful brand, established customer base and multichannel strategy spanning both a large retail network and digital platforms.

That has proven very profitable and the company continues to grow at pace. It has a large international footprint, especially in the key US market. It also unveiled plans this year to open hundreds of new shops each year.

At the interim results stage in September, JD said revenue grew 8.3% year on year while basic earnings per share were up 29.9%. The interim dividend more than doubled.

Can such strong performance continue?

There are risks. The capital expenditure for all those new shops could eat into profits. A tougher economy could also lead shoppers to spend less on things like trainers.

On balance I remain upbeat about the prospects, however.

The FTSE 100 company expects headline profit before tax and adjusted items for the full year of over £1bn. That is only about one seventh of the current market capitalisation, making the shares look dirt-cheap to me.

Another FTSE 100 share trading at what I see as a very attractive valuation is Legal & General (LSE: LGEN).

The pensions specialist has a price-to-earnings ratio of just six at the moment.

Not only that, but the company has a dividend yield of 8.4%. On top of that, its current policy is to raise the shareholder payout annually.

In fairness, dividends are never guaranteed. But the company does have a solidly profitable business model that consistently throws off large free cash flows.

On top of that, I like its strong brand, focus on a huge market with resilient demand and large existing customer base.

Is there anything I do not like about Legal & General shares at their current price?

One risk I see is turbulent stock markets making pension investors nervous, leading to them withdrawing funds and profits falling. It is no coincidence that the last dividend cut and cancellation came after the 2020 stock market crash and 2008 financial crisis respectively.

Over the long run, though, I see Legal & General as a great Footsie stock trading at a bargain price. I would be happy to top up my holding and tuck the shares away for the long term.

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.

C Ruane has positions in JD Sports Fashion and Legal & General Group Plc. 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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