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2 top FTSE 100 stocks I like under £5

In this article I’m going to look at two FTSE 100 shares that can be picked up for less than five pounds per share. The main upside of this price may be psychological as you will hold more shares, but it does also have the potential to uncover some cheaper gems and I think both these companies are potentially worth investing in right now.

A sleeping giant

Insurance company Aviva (LSE: AV) hasn’t been setting investors’ hearts racing in recent years, more like making their hearts sink. The share price has mostly been slipping downwards over the past five years, falling by around 19% at a time when the FTSE 100 index has risen by nearly 9%. But I think this sleeping giant may be ready to awaken.

The main reason for my optimism is that the company is now under new leadership. The previous CEO did a good job putting the company on a stronger footing after the recession of a decade ago, but now what’s needed is a fresh approach and a focus on growth. In March, Aviva promoted international insurance boss Maurice Tulloch to the role of chief executive with immediate effect.

Life under a new boss

The new CEO himself has said there is: “A clear opportunity to realise Aviva’s significant but untapped potential. Aviva is financially strong, we have a well-known brand and excellent businesses. But there is more to do to improve returns for shareholders.” Given his experience running different part of Aviva since joining in 1992, I believe he is well placed to deliver on the opportunity.

The shares offer good value as they trade on a P/E ratio of 10.96 and provide a 7% dividend yield. This is a combination I believe could reward investors very well if the insurer can improve growth rates over the coming years.  

Out of favour

Broadcaster ITV (LSE: ITV) is not in favour with investors due to concerns over advertising spending amplified by Brexit and economic concerns. There can be no running away from the fact the ITV is a cyclical company, but I believe it is better to buy a company when its price is lower and it is out of favour and then reap the rewards when investors back it again. Right now could be that time with the share price in the year to date down by nearly 7%.

Although ITV is heavily reliant on advertising it has for many years been shifting towards increasing productions revenues and under its fairly new CEO, Carolyn McCall, who joined after great success at EasyJet, this looks set to remain the strategy. There will be challenges in the short term, from squeezed advertising budgets, the popularity of video on demand services such as Netflix and companies spending budgets on digital advertising with Facebook, but I expect the broadcaster to remain profitable.

Even better for investors, the shares are currently good value and provide an above-market-average yield. The P/E is around nine which is very low, giving investors a margin of safety even if the company does struggle in the short term. And while investors wait for the company to rebound, they will be given a juicy yield of around 5.7%.

A Growth Gem

Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealth – and one of Fool UK’s contributors believes they’ve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutely free of charge, click here now.

Andy Ross has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. 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.