With the deadline for investing in a Stocks and Shares ISA fast approaching, there continues to be a number of FTSE 100 shares that could offer long-term appeal.
Although Sainsbury’s (LSE: SBRY) has experienced a turbulent period of late, the stock could offer good value for money over the long run. Alongside another company which released a positive trading update on Wednesday, it could be worth buying at the present time.
The stock in question is trade exhibitions and conferences specialist ITE Group (LSE: ITE). Its trading update for the first six months of the financial year showed its performance was in line with management expectations. Revenue increased 42% to £107m, with the impact of acquired events and strong organic growth helping to lift the company’s top-line performance.
Although the company faces headwinds, such as Brexit and macro-economic issues in Turkey, it’s expected to post a rise in earnings of 13% in the current year. This puts it on a price-to-earnings growth (PEG) ratio of 1.4, which suggests it could offer good value for money.
With ITE Group continuing to implement its strategy, which includes investment in areas such as enterprise resource planning, it appears to have a bright future. Since it has a dividend yield of 3.5% which is covered 2.2 times by profit, it may also offer improving income investing prospects over the long run.
With Asda having recently overtaken Sainsbury’s to become the UK’s second-largest supermarket, news flow for the business has been weak of late. Of course, there are concerns among some investors that the planned merger between the two is causing Sainsbury’s to become distracted. Whether this is the case or not, the deal appears to be unlikely to complete after concerns were raised by the competition watchdog regarding possible price increases for consumers.
As such, Sainsbury’s shares have been under pressure. They now trade 25% lower than they did just six months ago and have failed to take part in the wider FTSE 100’s rally since the start of the calendar year.
In the near term, the stock could experience further volatility. However, with earnings growth of 4% expected in the current year, it seems to offer good value for money. Sainsbury’s trades on a price-to-earnings (P/E) ratio of just 11, which indicates it may offer a wide margin of safety. Meanwhile, a dividend yield of 4.7% that’s covered 1.9 times by profit indicates there may be income investing potential on offer.
Although UK retail shares may not be a popular area of investment at the present time, the total returns on offer could be impressive at a time when consumers are experiencing real-terms wage growth. As such, now could be a good time to buy the stock for the long term.
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Peter Stephens 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.