Pick Up An Xmas Bargain With Barclays PLC & RSA Insurance Group plc!

Today I am looking at the investment prospects of two terrifically-priced FTSE 100 titans.

Financial giant fires higher

Shares in insurance-play RSA Insurance (LSE: RSA) have been prone to bouts of extreme volatility in 2015, with the failed takeover bid by rival Zurich naturally prompting wild trading activity during the spring and the summer.

The stock is currently down 4% since the start of 2015, but I believe this creates a brilliant bargain-hunting opportunity, as RSA Insurance’s business activity across core regions steadily improves and premiums move higher.

Thanks to its mammoth restructuring drive, RSA Insurance is expected to flip from losses of 14.4p per share in 2014 to earnings of 32.7p in 2015, creating an appealing P/E rating of 13.8 times — any reading below 15 times is widely considered attractive value. And this figure falls to 13.1 times for next year amid predictions of a 1% bottom-line improvement.

With RSA Insurance’s previously battered balance sheet now in much ruder health, and dividends now back in full flow, the ‘Square Mile’ has chalked in a handy full-year reward of 11.2p per share, yielding 2.6%. And a projected dividend of 14.3p for 2016, producing a far superior 3.3% yield, illustrates the terrific income prospects over at the London firm for the coming years.

A bankable beauty

As the British economy steadily moves up through the gears, I fully expect both earnings and dividends at Barclays (LSE: BARC) to head higher next year and beyond.

Barclays has had a year to forget in 2015, the bank’s share price having careered 9% lower since the turn of the year, and a colossal 26% down since the year’s highs reached back in the summer. But I fully expect the company to revisit these heights as revenues at its Retail Banking and Barclaycard divisions lift off.

The City expects Barclays to record earnings growth of 24% in 2015, and an extra 21% bounce is forecast for 2016. Not only do these projections create exceptional P/E ratios of 10.6 times and 8.6 times correspondingly, but a PEG multiple of 0.4 through to the close of next year underlines the bank’s brilliant value. Any number below 1 is widely considered a steal.

And with Barclays’ capital strength also increasing as its Transform package slashes costs — the firm’s CET1 ratio rose to 11.1% as of September from 10.3% last December — I believe dividend hunters also have plenty to get excited about.

This view is shared by the City number crunchers, and Barclays is expected to raise a prior reward of 6.5p per share to 6.6p in 2015. Sure, a consequent 2.9% yield may not be enough not raise one’s pulse, but a projected dividend of 8.3p is forecast for 2016, yielding a much-improved 3.6%. And I reckon dividends should continue to rise at an electrifying rate as profits pound higher.

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