Are Aviva plc, BAE Systems plc and ITV plc the FTSE 100’s best bargains?

At first glance, general insurance giant Aviva (LSE: AV) may appear too good to be true to stock chasers. With earnings expected to double in 2016, the FTSE 100 (INDEXFTSE: UKX) stock currently trades on a P/E rating of 8.7 times, well below the benchmark of 10 times that’s considered exceptionally cheap.

And City forecasts of a 23.6p-per-share dividend yields a staggering 5.8%, a figure that mashes the big-cap average of 3.5% by some distance.

But the result of last month’s Brexit decision has forced me to reconsider my previously-bullish view of the firm. The full impact of the referendum is likely to take years to be felt. But the result on Aviva’s asset management arm is already being seen — the company was one of several financial firms to halt redemptions at its property fund last week.

And while Aviva’s extensive international exposure should take the sting out of weakness at its insurance division, the company still sources a sizeable chunk of its profits here in the UK, leaving it in severe peril should a recession occur. I reckon investors should give Aviva short shrift for the time being.

Arms star

I believe that defence leviathan BAE Systems (LSE: BA) is on much safer ground by comparison.

As mentioned above, the impact of Brexit could be cataclysmic and result in massive spending cuts by the UK government. Theoretically this could put defence budgets firmly in the crosshairs.

But I don’t believe the restrictions imposed in the wake of the 2008/09 financial crisis will be repeated. Indeed, a rising threat from international terrorists — combined with rising geopolitical instability across the Middle East and expansionist measures from Russia and China — will make any future government reluctant to cut arms spend.

This should keep demand for BAE Systems’ hi-tech goods rolling out of the factory, in my opinion. And investors should also take confidence from the firm’s top-tier supplier status to the US Department of Defense.

BAE Systems currently deals on a decent P/E rating of 13.6 times for 2016, despite a predicted 4% earnings dip. And an estimated dividend of 21.7p per share creates a tasty 4.1% yield. I reckon the defence play is a great pick at current prices.

Box clever

Investor appetite for broadcasting giant ITV (LSE: ITV) has collapsed in recent months as advertising revenues declined in the run-up to June’s referendum.

And these pressures are expected to persist. Prior to the vote, media researcher ZenithOptimedia cut its ad revenue growth forecasts for the UK broadcasting market for 2016 and 2017, to 2% and 3%, respectively. Barclays Capital notes that these figures are down from 3% and 4% previously.

But I believe that ITV still offers plenty of reason to be optimistic for the long term. Income from its ITV Studios arm continues to explode, helped in no small part by aggressive expansion in the US and Europe.

And I expect ad revenues to pick up again once the current political and economic uncertainty following last month’s ballot clears.

A P/E rating of 10.7 times for 2016 — based on an expected 2% earnings rise — certainly makes ITV worthy of serious attention, in my opinion. And a projected 7.2p per share dividend, yielding a chunky 4%, provides an added sweetener.

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