The Motley Fool

2 top value FTSE 100 stocks I’m buying right now

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

View of Canary Wharf
Image source: Getty Images.

Property is one of the most defensive assets around. But for most investors, building an extensive, diversified property portfolio isn’t a realistic prospect. And even if you have the time and funds to do so, managing property can be an expensive and time-consuming business. And that’s where real estate investment trusts come in handy. 

These property-focused businesses give investors access to a broad array of managed properties at the click of a button, no matter how much you have to invest, and no matter how much experience you have in the market.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

British Land (LSE: BLND) and Land Securities (LSE: LAND) are two of the most significant landlords in the UK and, right now, shares in these two trusts are on special offer.

Unloved by the market 

Both trade at a deep discount to their net asset value, or the value of the property on their books. Investor concern about the impact Brexit will have on the UK property market is almost entirely responsible for this discount. Indeed, between the beginning and end of June 2016 (the month of the EU referendum), shares in these companies lost 18% and 11%, respectively.

The thing is, even though the shares registered a double-digit decline in the space of a month, the property underpinning these two companies’ valuations has hardly budged in value. For example, at the end of fiscal 2017, British Land’s net asset value per share was 915p, down slightly from 919p in 2016.

Thus, I believe that these two companies offer fantastic value at current prices with British Land currently trading at a 30% discount to net asset value, while Land Securities is trading at a discount of around 34%.

Not risk-free

That said, I do believe Brexit may have some impact on these companies’ property assets, so I’m not expecting either to trade at its full and net asset value anytime soon.

Nonetheless, the current valuation implies property values are set to fall by 30% from current levels, which I believe is highly unlikely, even in the adverse scenario.

According to several reports, the demand for offices in and around London remains robust with some market analysts noting “unprecedented” levels of demand from tenants. Some reports have even pointed to “supply pressures” in the market for office space over 50,000 square feet. According to the Times, since Brexit, the equivalent of “four Cheesegraters – or 2.4m sq ft – have been leased by the financial services sector in central London.” 

These figures indicate to me that the current discounts being attributed to British Land and Land Securities are too harsh. Therefore, I believe they could be some of the best value investments in the FTSE 100 today.

Not only are they trading at a discount to the value of the property on their balance sheets, but they also support market-beating dividend yields, so investors will be paid to wait for any turnaround. Shares in British Land currently support a dividend yield of 4.8% and shares in Land Securities offer a dividend yield of 4.6%.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Rupert Hargreaves owns shares in British Land Co and Land Securities Group. The Motley Fool UK has recommended British Land Co and Land Securities Group. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.