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Forget a Cash ISA! I think these 2 dirt-cheap FTSE 100 shares can help you retire early

Although money invested in a Cash ISA is not at risk of capital loss, it doesn’t offer the potential to earn an inflation-beating return over the long run. This could mean the spending power of capital you hold in a Cash ISA gradually deteriorates over time.

By contrast, a number of FTSE 100 shares appear to offer good value for money at present. Here are two prime examples of large-cap shares that could deliver impressive levels of capital growth due in part to their low valuations.


Investing in Morrisons (LSE: MRW) may appear to be an unwise move at the present time. After all, the prospects for the UK retail segment, and especially the supermarket sub-sector, are highly uncertain.

Factors such as weak consumer sentiment and an increasingly competitive landscape could mean Morrisons finds it increasingly challenging to deliver positive sales and net profit growth.

However, the company is expected to experience a growing bottom line in the current financial year, with its earnings forecast to rise by 10%. This shows its focus on improving the customer experience and the investment it has made in areas such as online are starting to pay off.

Despite its positive financial outlook, the stock trades on a price-to-earnings (P/E) ratio of just 12.5. This suggests it could be undervalued, and that there may be an opportunity for long-term investors to buy while it offers a favourable risk/reward ratio.

Furthermore, with Morrisons having a dividend yield of 4% that’s covered almost twice by net profit, the total return prospects for the business could be highly attractive.

BHP Group

Another FTSE 100 share that seems to be currently undervalued is diversified miner BHP Group (LSE: BHP). The company faces an uncertain future, with the potential for a slowdown in the rate of global GDP growth expected to cause investors to become less positive about its financial outlook.

Despite this, BHP could offer long-term growth potential. Its valuation suggests investors may have factored in the risks faced by the business, with its P/E ratio of 9.6 relatively low compared to its historic range.

Unlike some of its mining sector peers, the company offers a significant amount of diversity in terms of its geographic exposure and the commodities which it mines. While this may not prevent a share price fall should the global economic outlook deteriorate, it could help the stock to outperform many of its industry peers.

With a dividend yield of 7.9% that’s covered 1.3 times by profit, the mining company’s income investing prospects appear to be attractive. While less robust than other high-yielding FTSE 100 shares, the risk/reward ratio offered by the business may mean it has the capacity to produce high returns over the long run, helping you to retire early.

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Peter Stephens owns shares of Morrisons. 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.