These FTSE 100 stars are far, far too cheap!

Today I’m looking at two FTSE 100 (INDEXFTSE: UKX) stars offering unmissable bang for your buck.

Weapons-grade wonder

Investor appetite for BAE Systems (LSE: BA) has exploded in the wake of the UK’s Brexit decision, the defence sector living up to its reputation as a safe haven in volatile times. The arms builder has even visited 16-month peaks above 540p in the process. And I believe BAE Systems still offers terrific value despite recent share price strength.

For 2016 the engineer currently deals on a P/E rating of 13.4 times, comfortably below the big-cap average of 15 times. And a 4% dividend yield takes apart the FTSE 100 average of 3.5%.

BAE Systems is anticipated to endure a small earnings slip in the current year thanks to lumpy contract timings. But the firm’s long-term outlook remains pretty secure, in my opinion, thanks to its excellent relationship with the US and UK armed forces. Indeed, the company inked a £2.1bn, 10-year agreement with the Ministry of Defence to support its fleet of Typhoon fighter jets just last month.

The London firm is an expert across a variety of fields, from submarine construction and missile building through to designing counter-terrorism software, making it a top-tier supplier to the world’s major militaries.

This, along with positive currency effects, helped revenues edge 3% higher during January-June, to £8.7bn. And the firm’s order book stood at a healthy £36.3bn as of the end of the period.

With sales also taking off in developing markets — BAE Systems expects sales to grow 5% to non-Western customers in 2016 alone — I reckon the blue chip defence play is a steal at current prices.

A financial firework

But BAE Systems isn’t the only Footsie giant experiencing strong demand growth in exciting foreign markets.

Indeed, the wide geographical reach of insurance giant Prudential (LSE: PRU) has helped power profits higher in recent years. But I don’t believe this quality is currently reflected at current share prices — the stock is actually dealing at a slight discount to pre-referendum levels thanks to worries over the health of the British economy.

Consequently ‘The Pru’ deals on a mega-low forward P/E rating of 11.4 times, peaking above the bargain-basement benchmark of 10 times.

Of course significant economic turbulence in the UK  would cause a problem for Prudential. But I believe investors need to look to the brilliant progress Prudential is making elsewhere. The insurer saw operating profit at its Jackson life division in the US explode 10% in 2015, while its performance in Asia was even better — life and asset management profits here surged 17% on an annualised basis.

Prudential clearly has its finger on the pulse to meet the needs of its customers in new and established territories alike. And I expect rapid expansion across its global markets — facilitated by its brilliant cash-generative qualities — to continue driving the bottom line in the years ahead.

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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.