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2 top value FTSE 100 stocks I’d buy right now

The stock market washout of the past fortnight has seen plenty of princely picks across the FTSE 100 fall even further inside the crosshairs of value investors.

Ashtead Group (LSE: AHT) is one such business. I have long been a fan of the rental equipment specialist, even at its previously-elevated P/E multiples, with the firm on the fast track for rapid earnings growth thanks to the strength of its markets across the globe.

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Indeed, December’s trading update indicated that trading is going from strength to strength. Underlying rental revenues rose 22% between August-October, Ashtead advised, to £945.2m. This is on top of the 20% rise reported for the whole six months ending October to £1.77bn.

While the company has benefitted from recent hurricane activity in its core US territory, this is not the whole story. Indeed, Ashtead said: “Our end markets remain strong and a wide range of metrics have shown consistent improvement.” It subsequently advised that profits for the full year are likely to run ahead of previous expectations.

It is keen to ride these favourable conditions through its ambitious M&A programme too. It spent £298m on acquisitions during the first six months of fiscal 2018, up £142m. And it has both the appetite, and the financial means (free cash flow boomed to £37.7m during May-October), to keep the bolt-on buys coming thick and fast.

Profits powerhouse

Ashtead has a proven knack of growing profits at double-digit percentages and City analysts do not foresee this trend ceasing any time soon.

In the period to April 2018, the London-based business is expected to report a 22% earnings jump. And it is predicted to keep the run going with an extra 18% advance in fiscal 2019.

In my opinion, Ashtead’s great growth prospects are not factored-in at the current share price. A forward P/E ratio of 15.8 times may nudge above the accepted watermark of 15 times that indicates terrific value, but its corresponding sub-1 PEG reading of 0.7 suggests that the business is actually a proper bargain today.

I reckon recent share price weakness provides a terrific opportunity for dip buyers to grab a slice of the action.

A growth and dividend star

easyJet (LSE: EZJ) has also traded on undemanding PEG multiples for a long time now, and its own recent share price drop provides a fresh reason to invest.

Severe currency headwinds proved a significant factor in causing it to record two heavy, consecutive annual earnings dips. But with these troubles falling away, the budget flyer is expected to bounce back with rises of 23% and 21% for the years to September 2018 and 2019 respectively, leaving the company dealing on a prospective P/E ratio of 15.9 times and a corresponding PEG readout of 0.7.

There’s a lot for dividend chasers to get excited about too as the predicted return to earnings growth should light a fire under dividends again. So last year’s 40.9p per share reward is anticipated to rise to 47p this year, before springing to 62.6p in fiscal 2019, resulting in chunky 2.9% and 3.9% yields.

With customer numbers thriving — passenger numbers grew 8.9% in January to 5.16m — and easyJet still expanding its route and base network, I expect earnings and dividends to continue shooting skywards.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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