I’m building a list of the best FTSE 100 value stocks to buy for my Stocks and Shares ISA. Here are three I’ll be looking to snap up when I next have cash to invest.
JD Sports Fashion
Retailer JD Sports (LSE:JD.) slumped in value last week, its shares dropping as the company reduced its earnings forecasts. The ‘athleisure’ specialist has suffered as weak consumer spending power has damaged sales.
I think this represents an attractive buying opportunity. For the upcoming financial year (to January 2025) it trades on a forward-looking price-to-earnings (P/E) ratio of 7.9 times. This is below the Footsie average of 11 times.
Conditions could remain tough for some time. But I think JD’s current share price is a bargain given the retailer’s bright outlook for the rest of the decade.
Demand for fashionable, functional fashions like sportswear is tipped to grow steadily over the long term. Pleasingly, the premium end of the market where JD specialises is expected to expand especially strongly, too.
The UK stock is aggressively expanding to fully capitalise on this market boom as well. It will increase its store estate by 200 in the current financial year alone, taking the total across its 38 territories to around 3,600. The firm also continues to invest heavily in its e-commerce channel.
Legal & General Group
I bought my first Legal & General (LSE:LGEN) shares for my ISA last April, and went fishing for some more in late summer. Its excellent all-round value means I’m looking to buy more very soon.
At 250p per share, the share price also trades on a rock-bottom forward P/E ratio. For 2024, this sits at just 10.1 times.
On top of this, its shares carry a gigantic 7.86% dividend yield for this year. This smashes the FTSE 100 average of 3.8%. It also beats the corresponding readings of all of its major rivals, as shown in the graph below.
Created with TradingView. Also shows the forward dividend yields of Aviva, AIG, Zurich, Prudential and AXA.
Legal & General operates in a highly-competitive marketplace. But as economic conditions gradually improve, I expect demand for its wealth, protection, and retirement products to gradually bounce back.
I especially like the company’s exceptional track record of cash generation. It suggests it should have plenty of capital to pay large dividends and invest in the business for years to come. Latest financials showed its Solvency II capital ratio at an exceptional 230% as of last June.
Vodafone Group
Telecoms play Vodafone Group (LSE:VOD) also boasts a brilliant blend of low P/E ratios and sky-high dividend yields. For the current financial year to March these sit at 11.1 times and 10.2%, respectively.
But these impressive figures aren’t all for fans of value stocks to celebrate. Today the FTSE firm’s price-to-book (P/B) value sits at just 0.38. This indicates that the market is grossly undervaluing Vodafone shares relative to the value of its assets.
Created with TradingView.
Talks of a dividend cut have long done the rounds at Vodafone. But its resilient cash generation — allied with the rewards of its global streamlining — mean I expect it to continue paying dividends well above the index average.
Additionally, I think it could deliver excellent long-term returns as increasing digitalisation drives telecoms demand. This is especially likely in Vodafone’s fast-growing African territories.
