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Forget a Cash ISA! I’d aim to retire early with these 2 bargain FTSE 100 stocks

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While the FTSE 100 may have doubled in just over a decade, there are still a number of large-cap shares that appear to offer wide margins of safety.

Certainly, the world economy faces a period of significant uncertainty at present. Risks such as a trade dispute between China and the US, as well as Brexit, could hurt the global macroeconomic outlook.

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But, history shows buying opportunities are most appealing during such periods. Therefore, these two cheap FTSE 100 shares could be worth buying for the long term, having the potential to help you retire early.


The financial prospects for ITV (LSE: ITV) continue to be relatively uncertain. As a cyclical business, its outlook could be negatively impacted by the ongoing challenges facing the UK from a political and economic perspective. They may lead to a softening in confidence, with the end result potentially being a reduction in demand for TV advertising.

However, the company’s plans to reduce costs, invest in its digital growth opportunities, and expand the breadth of its operations could lead to a stronger entity in the long run.

Its plans to enter the streaming services segment through a collaboration with the BBC could enhance its long-term growth potential, while investment in its Studios division may widen its geographical spread in order to reduce risk.

While ITV’s near-term financial performance may disappoint, its dividend yield of 7% suggests it offers good value for money. With its dividend payout covered 1.9 times by profit, its shareholder payouts appear to be affordable – even though the company’s bottom line is due to remain at last year’s level in the current year. As such, for long-term investors, there may now be a buying opportunity on offer.


While ITV may be facing a period of lacklustre growth in the short run, FTSE 100 peer CRH (LSE: CRH) is forecast to deliver a rise in net profit of 16% in the current year.

The building materials business recently reported its strategy is working well. It has maintained cost discipline while also rationalising its asset base. This has led to an improvement in its margins, while it has also been able to afford to continue with its share buyback programme.

Since the company’s shares trade on a price-to-earnings growth (PEG) ratio of just 0.8, it seems to offer a wide margin of safety at present. Furthermore, its dividend yield of 2.7% could grow at a brisk pace, since it’s expected to be covered three times by profit in the current year.

Clearly, the prospects for CRH’s end markets could become increasingly uncertain in the short run. But, with a low valuation and what seems to be a sound strategy, the company’s share price indicates it offers good value for money alongside long-term growth potential.

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Peter Stephens 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.

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