Despite the recent market recovery, there are still plenty of cheap FTSE 100 shares on the market that may produce high total returns for investors in the years ahead.
With that in mind, here are three FTSE 100 shares that could be attractive long-term investments today.
Cheap FTSE 100 shares
Its latest trading update showed a 21.6% increase in sales across its businesses during the second quarter of 2020. As a result, it now expects to report a year-on-year rise in first-half profit.
City analysts had expected the company to report a 50% decline in earnings for the year before this release. It now looks as if the company will beat this projection. For the past six years, the group has reported average earnings per share of around 24p.
If earnings return to this level, the stock is currently trading at a forward price-to-earnings (P/E) ratio of just 10. This suggests Kingfisher may offer a wide margin of safety at current levels.
British Land Co
Another company that may feature on a list of cheap FTSE 100 shares is British Land (LSE: BLND).
The coronavirus crisis has had a significant impact on commercial property values across the UK. With a substantial proportion of its portfolio invested in commercial property, British Land has suffered as a result.
However, the business also has a diversified office portfolio and a significant property development pipeline. This puts it in a unique position compared to other cheap FTSE 100 shares.
Even after factoring in the recent decline in commercial property values, the strength of the rest of British Land’s portfolio has helped the company weather the crisis. What’s more, after recent declines, shares in the real estate investment trust (REIT) are trading at just 50% of their net asset value.
As such, the stock appears to offer a wide margin of safety and may produce high total returns for investors in the years ahead.
And finally, if you’re looking for cheap FTSE 100 shares, it may be worth taking a closer look at Smurfit Kappa (LSE: SKG).
The boom in e-commerce activity during the coronavirus crisis may have put the provider of paper-based packaging products in the perfect place to prosper from the pandemic. As of yet, the business has not provided detailed information on its trading performance. However, figures from other companies and parcel delivery services, suggest the demand for packaging has exploded over the past few months.
As Smurfit is one of the largest packaging producers in Europe, it has a definite competitive advantage in this market. It is also one of the few cheap FTSE 100 shares that dominate its respective market. Even if the company has not prospered in the pandemic, its market position should help it stage a rapid recovery in the years ahead.
This may lead to attractive total returns for shareholders when the stock is owned as part of a well-diversified portfolio.
Rupert Hargreaves owns shares in British Land. The Motley Fool UK has recommended British Land Co. 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.