4 of the best value stocks to consider buying this May

Royston Wild discusses a handful of strong (and undervalued) FTSE 100 and FTSE 250 stocks for savvy investors to consider buying this month.

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I’m building a list of the best value stocks to buy in the coming weeks. Here are four for savvy investors to seriously consider.

ITV

Commercial broadcaster ITV (LSE:ITV) trades on a price-to-earnings (P/E) ratio of just 8.3 times for 2024. Meanwhile, its prospective dividend yield stands at 7.1%.

This low valuation reflects justifiable ongoing fears over the state of the UK advertising market. But I believe that the Love Island maker’s long-term growth potential is being undervalued at the current share price.

ITV Studios is a global production heavyweight with enormous growth potential as streaming companies invest in content. Revenues at the division rose 4% last year to record levels, while sales grew ahead of the broader market too.

The FTSE 250 firm’s also making impressive progress with its own streaming operations, providing another lever for impressive profits expansion. The number of monthly active viewers using its ITV Hub platform surged by almost a fifth in 2024.

Assura

Some healthcare-related stocks like Assura (LSE:AGR) could be vulnerable to changes in NHS policy. But as things stand today, the outlook here remains extremely bright.

This real estate investment trust (REIT) owns and rents out primary healthcare facilities such as GP surgeries. Demand for these sorts of properties is soaring as the health service tries to divert patients away from packed hospitals.

I believe Assura has excellent long-term growth potential too. As Britain’s elderly population rockets in size, the need for healthcare facilities will surely follow suit.

Today, this FTSE 250 stock trades on a forward earnings multiple of 11.3 times. It also carries an 8.2% dividend yield.

WH Smith

Retailer WH Smith (LSE:SMWH) is another bargain FTSE 250 stock on my watchlist this month. Its shares currently command a price-to-earnings growth (PEG) ratio of just 0.9.

Any reading below 1 indicates that a share is undervalued.

WH Smith’s high street operations are vulnerable as Britain’s economy bumps along the bottom. The amount people have to spend on magazines, books, confectionary and the like could remain under strain for some time.

But this is offset by the huge earnings potential of Smith’s travel division, in my opinion. Sales here continue to soar (up 13% in the six months to February). And the company’s committed to international expansion to hopefully drive its long-term profits.

Shares in Legal & General (LSE:LGEN) have plummeted recently as hopes of interest rate cuts have faded. Higher-than-expected rates could have serious complications for the FTSE 100 firm’s earnings forecasts.

But I believe the financial services giant remains a brilliant buy right now. I invest for the long term, and I’m prepared to accept some immediate pain if the outlook for the next decade is potentially lucrative.

I like Legal & General because of its dominant role in fields such as life insurance and asset management. This could deliver stunning returns as an ageing population drives financial services demand higher.

And today, the company looks dirt cheap. Legal & General shares trade on a forward P/E ratio of 9.5 times and carry a 9% dividend yield.

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 positions in Legal & General Group Plc. The Motley Fool UK has recommended ITV. 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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