These might just be the cheapest FTSE 100 shares for me to buy next

There are many ways we can consider which are the best UK shares to buy at any time. I’m seeing some tempting low valuations now.

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When I’m looking for cheap shares to buy on the Footise, there’s one fairly simple measure I often start with.

I look at all the forecast price-to-earnings (P/E) ratios, for the current and next financial years. Leaving out any that don’t have a positive P/E, I check out the lowest ones.

The following table shows five cheap FTSE 100 stocks by that measure, all of which attract my attention. It shows the forecast P/E for the current year, plus next year. And I’ve thrown in dividend yields too.

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StockRecent
share price
P/E curP/E nextDiv curDiv next
International
Consolidated
Airlines
190p4.94.52.7%3.4%
Centrica117p6.18.23.6%4.3%
Beazley755p6.66.61.9%2.1%
NatWest Group
(LSE: NWG)
336p7.27.05.4%5.7%
BP (LSE: BP.)413p9.56.85.7%6.2%
(Sources: Sharecast, Yahoo, MarketScreener)

Super cheap

Airlines are a bit hammered right now by the Middle East conflict and the effect that’s had on the oil price.

But higher oil prices shouldn’t do BP any harm, and that’s one of the two that attract me the most of these. Its forward P/E of 9.5 isn’t one of the lowest. But earnings forecasts that would drop it to 6.8 next year get it on to the list.

Despite Brent Crude trading at $78 a barrel at the time of writing, the BP share price has still fallen 12% so far in 2024. And it’s still lower than it was before the pandemic.

Created with Highcharts 11.4.3Bp P.l.c. PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

In its last quarterly update in July, CFO Kate Thomson said:

Our decision to increase our dividend by 10%, and extend our buyback programme commitment to 4Q 2024, reflects the confidence we have in our performance and outlook for cash generation.

The big unknown is how long BP will be able to pump oil and make profit from it. And we will, surely, wean ourselves of fossils fuels some day.

But a cash-cow stock like BP, paying big dividends while on low P/E ratios like these? It all makes me seriously consider buying.

Best value bank?

That low valuation for NatWest Group makes me wonder if it might be the best FTSE 100 bank for me to add to my Stocks and Shares ISA in 2024.

Those low forecast P/E multiples are about half the long-term Footsie average. And they come even after the share price has had a cracking 2024, up 53% year-to-date.

Created with Highcharts 11.4.3NatWest Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

My main fear is what impact falling interest rates could have on Barclays’ lending margins. And it’s sounding like we might have bigger cuts sooner.

As well as the dividends, NatWest has had the cash for a £1.2bn share buyback, which it completed in May. And the acquisition of £2.5bn of mortgages from the troubled Metro Bank looks like a canny move.

For the full year, the bank told us at interim time it expects a return on tangible equity above 14%, which I rate as very attractive. But the board did point out that year will depend on our uncertain economic outlook.

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Alan Oscroft 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.

Like buying £1 for 51p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

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