FTSE 100 shares are rising but these 2 still look like great bargains!

This Fool has his eye on these two cheap FTSE 100 shares. Here, he explains why and digs deeper into the stocks.

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Even though the FTSE 100‘s gone on a tear, I still see plenty of shares that look like great value on the index.

Here are two that have especially caught my attention. I reckon investors should consider taking a closer look at them today.

M&G

While the Footsie’s soared, shares in investment manager M&G (LSE: MNG) haven’t. They’re down 11.6% so far this year. Zooming out, their 12-month performance makes for better reading, but they’re still down 1.7% during that time.

Yet I’m on the hunt for value. So a cheap share price shouldn’t deter me if I see potential in a stock. And when it comes to potential, M&G has a bundle of it.

A lower share price means a higher dividend yield. Right now, M&G boasts a 9.9% payout, the third highest on the Footsie. Since listing five years ago, M&G’s increased its dividend payout every year.

The business has a large customer base and a strong brand, two major factors I look for when investing in a stock. M&G has millions of customers in 26 markets. It’s for reasons like that it managed to grow operating profit to £797m last year.

A choppy economy will continue to hamper the firm. Uncertainty surrounding interest rate cuts is a detriment to M&G’s operations. Namely, it impacts its assets under management as lower customer confidence can see money pulled from its funds.

But the stock looks like it could be a steal at its current price. It’s trading on just 8.7 times forward earnings. That’s lower than the FTSE 100 average and looks like great value to me.

Shell

Next up is Shell (LSE: SHEL). After a strong run, its share price has retreated in the last month, falling 6.1%. Nevertheless, it’s still up 6.2% year to date and has climbed a healthy 19.1% in the last 12 months.

Its drop in price is largely aligned with a fall in oil prices. The stock soared when prices surpassed $120 a barrel. Now it’s down to just below $80, the Shell share price has suffered as a result. That’s a risk to consider. The stock’s highly cyclical.

But I see potential here. Like M&G, I think it could be undervalued. The stock trades on 8.1 times forward earnings. That looks like a steal, in my opinion.

There’s also its 3.9% yield. Compared to M&G, that seems like pocket change. That’s forecast to rise slightly this year. Management has also been on a mission to buy back shares in the last few years, which I like to see.

In May it announced a fresh $3.5bn buyback programme. Last year it rewarded shareholders with over $23bn in payouts.

Like its Footsie counterpart, Shell will be impacted by the current economic uncertainty we’re facing. The oil and gas sector’s also prone to issues such as rising windfall taxes and the green transition.

But I think now could be a smart time to pounce while its shares look cheap. If I had the cash, I’d pick up both stocks today.

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 no position in any of the shares mentioned. The Motley Fool UK has recommended M&g 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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