Why Lloyds Banking Group PLC & Marstons PLC Offer Irresistible Bang For Your Buck!

Today I am looking at two FTSE giants throwing up plenty of value for savvy stock seekers.

Bank on a bargain

Thanks to the improving health of the British economy, I believe that banking goliath Lloyds (LSE: LLOY) is a sound choice for both growth and income investors. The business has seen its share price trend steadily lower since the summer — prices hit their cheapest since April 2014 just this week — but I believe this presents a sound buying opportunity.

Lloyds is expected to enjoy a 2% earnings advance in 2015, resulting in a P/E multiple of just 8.6 times — any reading below 10 times is widely considered exceptional value for money. And despite predictions of a 6% slide next year, the banking giant’s earnings ratio remains at just 9.3 times.

Sure, chief executive António Horta Osório’s decision to scale back Lloyds’ global footprint and re-focus its attention on the British high street may make it less of an exciting growth pick than many of its sector rivals. But such measures naturally make Lloyds less of a risky proposition, a particularly promising signal for dividend chasers.

And when you factor in the fruits of extensive cost-slashing on the firm’s cash pile — Lloyds’ CET1 ratio stood at a healthy 13.7% as of September — the omens look promising for the firm’s recently-resurrected dividend policy. Indeed, the City expects a dividend of 2.4p per share for 2015, yielding a chunky 3.4%. And this figure leaps to 5.3% for 2016 amid forecasts of a 3.8p reward.

Brew up brilliant returns

Like Lloyds, I believe pub operator Marston’s (LSE: MARS) is a splendid stock choice for bargain hunters. The Midlands business announced today that underlying revenues leapt 7% during the 12 months to September 2015, to £845.5m, a result that drove underlying pre-tax profit 10% higher to £91.5m.

The market responded by sending the company’s share price almost 3% higher from Wednesday’s close, and I for one share this current investor optimism. The restructuring programme over at Marston’s helped drive profits higher across all segments, despite the business operating ‘just’ 1,600 outlets at present, down from more than 2,000 just two years ago.

While the closure of underperforming pubs is clearly paid off handsomely, and the company’s vow to open more than 20 new-build pubs in the current period promises to deliver further gains, Marston’s is also benefitting from surging demand for its home-brewed ales. Indeed, the successful rollout of labels like Hobgoblin Gold helped Marston’s enjoy volume growth of 15% last year.

Marston’s is clearly a business with strong momentum, and the City expects earnings to advance a further 6% in the year to September 2016, creating a mega-low P/E multiple of 11.7 times. And when you throw in a projected dividend of 7.3p per share, yielding a market-bashing 4.6%, I believe value hunters will find the brewer hard to overlook.

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Royston Wild 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.