The FTSE 100 is jam-packed with top-quality bargains! Here are 2 I’m eyeing

This Fool has his eye on these two FTSE 100 constituents. Here he breaks down why he’s considering buying their cheap shares.

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Some investors may question whether it’s still worth buying businesses on the FTSE 100 after seeing the index surge this year. I’m not one of them.

Scouring the UK-leading index, I still see plenty of top-quality companies trading on solid valuations that look like attractive investment propositions today.

We’re now into the second half of the year and while I’m expecting some volatility along the way, I’m still backing Footsie shares to keep up their fine form over the next six months and beyond.

I especially like the look of these two. If I had the cash, I’d strongly consider buying some shares this month.


A stock I’ve been keeping close tabs on is Next (LSE: NXT). It currently has a price-to-earnings (P/E) ratio of 13.5. I think that’s good value for a business of its quality.

Next has already stated that it’s expecting sales for the rest of the year to slow down. In all fairness, we’re slap bang in the middle of a cost-of-living crisis, which has seen consumers cut back on spending. Other factors such as wet spring/summer weather are likely to harm sales, according to the business.

But even so, its full-year profit is still expected to climb 5% to £960m, despite tough trading conditions. That highlights the resilience of the business.

I’m also expecting its share price to be given a boost when interest rates are eventually cut. Inflation has fallen to the government’s 2% target. If it stays there, that means we could see multiple cuts this year that should give consumers more confidence with their finances.

Its share price is up 10.7% this year and 33.7% over the last 12 months. I’m hoping it can carry this momentum into the second half of the year.


I’ve also been paying close attention to Centrica (LSE: CNA). Its shares have a P/E ratio of just two. It doesn’t get much cheaper than that.

That’s expected to rise to 7.7 times for 2024 and 10.3 for 2025. But even trading at those valuations I think Centrica would be a shrewd stock to consider.

The business has benefitted in the last few years as energy prices have soared. As prices shot up, so has its share price. But that highlights one risk with the stock: it’s cyclical. On top of that, the energy transition is another threat to consider.

But with over 10m customers, the British Gas owner has a dominant market position. That gives it a competitive edge.

There’s also its 2.8% dividend yield. That’s below the Footsie average. However, with plenty of cash on its books, there’s the possibility it keeps rising. Last year, the firm increased its payout by 33%.

It hasn’t posted the strongest performance this year and its share price has pretty much flatlined, rising just 0.4%. But up 16.5% over the last 12 months and 61.1% in the last five years, I’m strongly considering snapping up some shares.

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 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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