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Have £3,000 to invest? Here’s a FTSE 100 dividend stock I consider a bargain after recent selling activity

The sharp sell-off in financial markets over the past few weeks has left the FTSE 100 positively overflowing with bargains.

Take GVC Holdings (LSE: GVC) for instance. Its share price has ducked by close to double-digit percentages since the start of October, meaning that the gambling giant’s price has corrected more than 25% since the record highs of £11.70 per share struck at the end of July.

This degree of bearishness is baffling. Indeed, around the time that the summer rot set in, it had announced an ambitious accord with MGM Resorts International to bolster its global footprint by entering the US, and potentially give revenues a massive dose of rocket fuel.

And since then, trading details have remained extremely encouraging, including third-quarter financials that were unpackaged last week.

Revenues momentum rapidly improving

In this release, GVC, whose brands include bwin, Ladbrokes and Coral, declared that thanks to market share gains in all of its major regions, turnover continued to power higher during the July to September quarter. Total net gaming revenues (or NGRs) across the group clocked in at 14%, rising from 8% in the first six months of 2018.

And once again the huge potential of the rapidly-expanding online gaming segment was laid bare, the company declaring that NGRs generated via cyberspace detonated 28% during the three months to July.

One other thing: speaking of that aforementioned drive into North America, GVC said it believes its “sports-betting joint venture with MGM is best placed to be the market leader in the US and we have taken the first steps on that journey with the soft-launch of our sports-betting app in New Jersey.”

Wonderful value, delicious dividends

City analysts believe that the Footsie firm has all the tools to keep its strong run of earnings rises in action, and they are forecasting a 60% earnings rise for 2018. A more subdued 5% rise is predicted for 2019 although, given the rate at which GVC’s top line is gaining momentum, I reckon that this forecast has more than a fighting chance of being upgraded in the months ahead.

Regardless, these perky profits estimates lead to expectations of more generous dividend expansion. GVC lifted the full-year payout 13% last year to 34 euro cents per share, and another heady hike, to 38 cents, is anticipated for this year. Consequently the yield sits at 3.9%, a figure that improves to 4.3% next year on account of an estimated 42 cent reward.

As I suggested in the headline, the gaming star can be considered a bona fide bargain at current prices. Those earnings projections create a forward P/E ratio of just 10.9 times, comfortably below the widely-accepted value watermark of 15 times or less, in addition to a corresponding sub-1 PEG reading of 0.2.

I think GVC is a share that all savvy dip buyers should be giving close attention to today. I feel it has the capacity to make its shareholders richer over the next decade and beyond.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended GVC Holdings. 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.