2 bargain FTSE 100 stocks I’m eyeing for 2024

This Fool is always on the lookout for cheap shares. As such, he’s targeting these FTSE 100 stocks he thinks could be winners in 2024.

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As we edge closer to the New Year, I’m building a list of FTSE 100 stocks that I’m thinking about adding to my portfolio.

Here are two I’m watching like a hawk.

Barclays

This year’s been far from plain sailing for Barclays (LSE: BARC). But I feel that 2024 will be better.

At their price of 140p, I think Barclays shares look cheap. And there are several reasons for this. First, the stock trades on a price-to-earnings (P/E) ratio just north of four. That firmly cements it as one of the cheapest shares on the Footsie, by that measure. And to me it signals that investors may be undervaluing the stock. On top of that, its price-to-book ratio of 0.3 sits considerably below the ‘benchmark’ of one.

I’m also searching for ways to increase my passive income. And this is where the stock ticks another box. A dividend yield of 5.5% is solid. Covered comfortably by earnings, I’m confident of a payout.

I do have my concerns. Besides the obvious inflationary pressures, Barclays’ Q3 results weren’t the most impressive. News of extra costs in the last quarter of 2023 spooked investors. This will be something to watch in the months ahead.

However, the combination of a low valuation and handsome yield is what I like to see. With a global presence, I also think its diversification places it in a strong position to face any challenge. It’s already a staple in my portfolio. In 2024, I’ll be keen to top up my holdings.

Burberry

Next up is high-end fashion powerhouse Burberry (LSE: BRBY). Like Barclays, the stock has endured a tough spell in the last few months. This week, it also took a massive hit after issuing a profit warning in its interim results. But I’m fairly confident for the long run.

There’s plenty to like about the business. With a P/E ratio of around 13, it looks pretty cheap.

A robust balance sheet and a high level of profitability are additional factors. The firm also has ambitious plans for the future, including a long-term sales target of £5bn. Although not as appealing as Barclays, a 3.8% yield isn’t something to be sniffed at either.

An uncertain economic outlook, especially in the Americas, has harmed the business’s performance lately. Burberry has warned that the global slowdown in demand for luxury items will impact the likelihood of it achieving its full-year guidance.

Yet despite this, the business has offered reason for hope in 2024, fuelled by “the ongoing recovery in Mainland China”. Longer term, I also think growing affluence in Asia will prove to be key. Burberry has incredibly strong brand recognition. And the firm and its UK roots are coveted in the region.

I’d expect it to continue to suffer in the near term. After all, a cost-of-living crisis means not so many consumers have spare cash lying around to spend on luxury goods. However, in 2024 and beyond, I expect strong momentum as shoppers begin to regain confidence and look to spend their money. With any spare funds in the New Year, I’m planning on opening a position.

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 Keough has positions in Barclays Plc. The Motley Fool UK has recommended Barclays Plc and Burberry Group 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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