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The FTSE 100 Is Dirt Cheap: Take Advantage With SABMiller plc, Rio Tinto plc & Banco Santander SA

FTSE100

Although the FTSE 100 has enjoyed a couple of strong sessions in recent days, it remains over 4% down during the last month. This puts it on a dividend yield of 3.5% and a price to earnings (P/E) ratio of just 13.2.

Both of these numbers indicate that the index remains attractive – especially when you consider that the S&P 500 trades on a P/E ratio of 18.8 and yields just 2%.

Furthermore, the UK and global economies seem to be on the up, while Central Banks across the developed world seem committed to an ultra-loose monetary policy for as long as it takes to push economies past a potential deflationary period.

So, with this in mind, here are three stocks that could be worth buying now that the FTSE 100 has pulled back and while it continues to have a bright future.

SABMiller

As today’s investor update from SABMiller (LSE: SAB) highlighted, there is growth potential in beer. That’s not just in emerging markets, but in developed markets, too, where SABMiller plans to change people’s perceptions of beer through new flavours and a new marketing angle.

Of course, SABMiller seems to be performing well even without a new marketing strategy. For example, it is forecast to increase earnings by 10% next year and, with a strong track record of growth, the company remains a hugely reliable earnings grower for long-term investors.

With shares in the company having pulled back by 2% in the last month, their defensive qualities have also come to the fore. With further turbulence likely, that could prove to be a real asset for investors moving forward.

Rio Tinto

With shares in Rio Tinto (LSE: RIO) falling by 7% over the last month, it is clear that market sentiment remains low after a weak iron ore price has hit profitability at the company. However, at least partly due to increased efficiencies and cost cutting, Rio Tinto seems to be in good shape moving forward.

Indeed, the company is forecast to increase its bottom line by 4% next year. This may seem rather pedestrian, but could be a relatively strong performance given the tumbling iron ore price.

Furthermore, Rio Tinto now trades on a hugely attractive P/E ratio of 9.5 and yields a well-covered 4.4%. As a result, it could be worth buying for the long haul.

Santander

While many UK banks may have had a disappointing 2014, shares in Santander (LSE: BNC) have risen by 8% year-to-date. A key reason for this is the bank’s excellent growth forecasts, with it being expected to grow its bottom line by 50% over the next two years.

Although shares do trade on a premium rating to the FTSE 100 of 15.1 (versus 13.2 for the index), their strong growth potential means that they have a price to earnings growth (PEG) ratio of just 0.6. This means that, while not cheap, they seem to offer good value and, with the company and the wider index having bright prospects, they could be worth buying on a long term view.

While Santander, SABMiller and Rio Tinto may be worth buying right now, none of the three companies have been awarded the title of The Motley Fool's Top Stock Of 2014-15.

The winner is a company that has super-strong growth prospects, pays dependable dividends, and trades at a hugely appealing price. As a result, it could give your portfolio a boost and make the next few years even more prosperous ones for your investments.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.