Serabi Gold (LSE:SRB) and Central Asia Metals (LSE:CAML) are two cheap shares that have grabbed my attention. Want to know what makes them brilliant bargains to consider in February? Read on.

Golden gains

Surging bullion values have driven Serabi Gold’s share price 167% higher over a 12-month horizon. Yet the Brazilian miner still offers tremendous bang for your buck, in my view.

Its P/E ratio comes in at 4.6 times for 2026, while it’s price-to-earnings (PEG) multiple is a modest 0.1. The dividend yield is also a healthy 3.4%, beating the UK stock market average.

Production is soaring under Serabi’s plan to produce 100,000 gold ounces by 2028. It’s given the firm’s profits a significant boost as metal prices have surged.

Can gold’s bull run carry on going, though? Some feel gold could be due a correction following last year’s enormous gains. I believe, however that bullion has much further to climb. The US dollar is in freefall, dropping to four-year lows in recent days. I’m expecting it to keep weakening as uncertainty over US economic, foreign, and trade policy rolls on, making it cheaper to buy dollar-denominated bullion.

The declining US dollar this week propelled gold prices to new record peaks above $5,300 per ounce. Deutsche Bank analysts think the yellow metal could hit $6,000 in 2026, it’s said in recent days. Interestingly, they’ve also said “a $6,900 per ounce price would in fact be more in line with the past two years’ outperformance“.

Gold should also benefit as falling interest rates boost inflationary pressures and broader geopolitical disruption continues. Serabi’s rock-bottom valuation gives it (in my opinion) ample scope to keep climbing in this environment.

Another cheap mining stock

Central Asia Metals shares some key qualities with Serabi. Its shares have been blown higher by a surging commodity price, in this case copper. Over the last year, the miner’s risen 48% in value.

Yet, today, the company — which produces the red metal from Kazakhstan’s Kounrad mine — also still offers excellent value. Its forward P/E ratio is just 8.6 times, while the PEG comes in at 0.2.

A juicy 5.9% dividend yield sweetens the deal.

Do Central Asia Metals shares have as much money-making potential, though? It’s possible in my view. Copper prices should also benefit from the weakening US dollar. However, they could come under pressure if near-term demand indicators worsen — for instance, if China’s economy takes a fresh bump.

But with supply-related problems deepening, I believe the industrial metal could keep rising strongly. I’m certainly confident in the copper price outlook over the long term, as consumption from fast-growing sectors heats up. We’re talking about data centres, electric vehicles, and renewable energy projects, to name but a few.

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Small-caps don’t always come with the stability of the big names, but they can offer fatter payouts and the chance to uncover hidden gems. Of course, liquidity’s lower, so selling a position at the desired price isn’t always straightforward. That said, every so often, I spot smaller UK shares that combine generous dividends with reasonably strong financials. 

Here are two I think income-focused investors should weigh up. Both strike me as overlooked dividend plays that could sit neatly in a diversified income portfolio.

Central Asia Metals

Central Asia Metals (LSE: CAML) is a copper producer with operations in Kazakhstan and North Macedonia. It’s not the kind of stock that usually dominates headlines, but the dividend yield is an eye-popping 12.7%. For investors chasing a second income, that’s going to grab attention. The  £247m company has also built a strong track record, paying dividends for 13 consecutive years.

Financially, it looks decent too. The dividend payout ratio stands at 83.8%, which is high but still within reason for a miner. On profitability, the net margin sits at 17%, and the balance sheet is almost debt-free – a rare strength in the sector. With a price-to-earnings (P/E) ratio of just 9.57, it even looks undervalued compared with peers.

But some risks can’t be ignored. Mining in emerging regions brings political and currency-related uncertainties. Any disruption in Kazakhstan or North Macedonia could directly hit production. The share price has also slipped 6.7% over the past five years, and investor confidence recently took a knock when Berenberg trimmed its price target from 180p to 170p.

Despite those challenges, I think Central Asia Metals is still worth considering for income hunters. The yield is hard to overlook, and the clean balance sheet gives it room to manage bumps along the road.

City of London Investment Group

City of London Investment Group (LSE: CLIG) shouldn’t be confused with the better-known City of London Investment Trust. This is the holding company behind the business, focused on running asset management operations.

It has a slightly lower yet still-healthy dividend yield of 8.52%, with an 11-year track record of continuous payments. Balance sheet strength looks reassuring, with low debt and an operating cash flow of £18.42m. Margins are also robust, which supports the sustainability of those payouts.

On the flip side, the dividend payout ratio sits at 113.4%, which is stretched. That’s the sort of number that makes me pause because it suggests future payouts could come under pressure if profits dip. The price-to-book (P/B) ratio of 1.58 also hints that the shares may be slightly overvalued compared with other asset managers. And unlike some small-caps, the growth potential looks limited, with the share price not expected to climb much.

Even so, with a yield comfortably above the FTSE 100 average and a solid financial footing, I think the £187m company’s another one worth checking out for anyone building a second income portfolio.

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Pan African Resources

Investing in gold stocks can be risky. Disappointments at the exploration, mine development and production phases can be common, leading to significant downgrades in earnings forecasts.

However, when gold prices rise they can also offer significant returns. Take Pan African Resources (LSE:PAF), for instance. The business — a mid-tier operator with projects across South Africa — has risen a whopping 40.7% in value since the start of 2025.

Amid signs of reviving gold demand from investors, I think it could be set for further gains. A depreciating US dollar, falling interest rates, and conflict in Eastern Europe and the Middle East are just a few price drivers in play.

I like the idea of considering gold stocks to seize this opportunity. This is because they offer a leveraged return — due to their relatively fixed cost base, their profits often rise at a faster pace than gold prices during bull markets.

For this financial year (to June 2026), Pan African expects all-in sustaining costs (AISC) of between $1,475 and $1,525 per ounce. That’s substantially below the current price of gold, at $3,302. And the margin will get larger if, as I expect, bullion prices rise during the second half of the year and beyond.

City analysts expect Pan African’s earnings to soar 90% during financial 2026, driven by a strong gold price and production ramp-ups at the Evander mine. This leaves the company trading on a forward price-to-earnings (P/E) ratio of 4.7 times.

Underlining the stock’s excellent value, its price-to-earnings growth (PEG) is just 0.1. Any reading below 1 indicates that a share is undervalued.

Central Asia Metals

Base metals producer Central Asia Metals (LSE:CAML) is another AIM-listed mining stock I feel is undervalued at current prices. Its forward P/E ratio is higher but still pretty low at just 8.2 times.

The company makes most of its money from copper, a commodity that’s been in the headlines a lot recently. As part of his evolving trade policy, US President Trump announced plans to put 50% tariffs on his country’s red metal imports. The plan is to supercharge domestic production through the construction of new mines.

The trouble is that the US only holds around 5% of the world’s copper. And on top of this, new mines there take around 29 years to build, according to analysts at ING Bank.

With existing mines becoming depleted in other regions, and a lack of new projects scheduled for the next decade, it still appears that a huge copper shortage is coming that could drive up prices.

I like Central Asia Metals especially because its debt-free, robust balance sheet gives it scope to expand to capitalise on this opportunity. Its recent A$230m bid to purchase North America-focused New World Resources illustrates its considerable financial strength.

Be mindful, though, that copper stocks could come under pressure if global copper consumption temporarily cools.

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As always, when something looks too good to be true, the sceptic in me awakens. So I decided to find out if there’s a catch — or if I really struck gold.

Central Asia Metals

Central Asia Metals (LSE: CAML) is a small-cap, specialist base metals producer operating in lesser-known corners of the world. Its flagship asset is the Kounrad copper recovery plant in Kazakhstan, which can produce up to 14,000 tonnes of copper annually. It also owns the Sasa mine in North Macedonia, which can churn out around 21,000 tonnes of zinc and 29,000 tonnes of lead a year.

It isn’t a sprawling global miner like Rio Tinto or Glencore. Rather, it’s a compact, focused business generating healthy cash flows from two high-quality operations.

But does it have long-term potential?

Growth and valuation metrics

On the growth front, it’s a bit of a mixed picture. Revenue increased 6.7% year on year, while diluted earnings per share surged 27.6%, showing that margins have improved even as top-line growth has stayed modest.

However, the share price has moved up just 15.3% over the past five years, underperforming both the broader market and many commodity peers. The market-cap is also down nearly 28% in the last year, leaving the company worth a modest £282.5m.

However, that means the valuation now looks attractive. The company trades on a price-to-earnings (P/E) ratio of 7.6 and a PEG ratio of just 0.28, which is low enough to indicate the shares could be undervalued relative to growth.

Which brings us to…

A generous, well-covered dividend

The real draw for income investors is the dividend. CAML has paid dividends for 13 consecutive years, currently yielding a bumper 11%. Even with a relatively high payout ratio of 80%, it looks sustainable given the firm’s 23.8% net margin, £43m in free cash flow, and zero debt on the balance sheet. 

Few dividend shares in the mining sector combine such solid cash generation with no financial leverage.

So what exactly is the catch?

The first obvious risk is the industry itself. Mining’s notoriously cyclical and Central Asia Mining’s profits are heavily tied to global demand for metals like copper and zinc. Although both are critical for infrastructure and the green energy transition, prices can swing wildly on economic sentiment or geopolitical disruptions.

Then there’s the company’s concentration risk. Operating only in Kazakhstan and North Macedonia exposes it to country-specific regulatory, tax and currency risks. Its falling market-cap and thin trading volume also make the stock more volatile and potentially harder to exit quickly in tough times.

My take

Copper and zinc markets stand to enjoy long-term demand growth from electric vehicles, renewables and grid upgrades. For investors seeking some exposure to this market, Central Asia Metals looks compelling. 

It may not be a glamour stock and it carries geopolitical risk, but the combination of solid profitability and that hefty yield means it’s certainly a stock worth considering.

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Anglo Asian Mining

What it does: Anglo Asian Mining is a gold and copper producer that’s listed on the Alternative Investment Market (AIM).

By Royston Wild. Thanks to its suite of gold projects, Anglo Asian Mining’s(LSE:AAZ) share price is rising rapidly as bullion’s multi-year bull run continues.

The small cap — which owns the Gadir and Gedabek gold, silver and copper mines in Azerbaijan — has risen 103% in value over the last year.

With macroeconomic and geopolitical uncertainty growing, and fears of resurgent inflation back on the boil, I think gold prices could have much further to go after hitting multiple new record highs in 2025.

However, Anglo Asian Mining’s foothold in the gold industry isn’t the only reason why I think it could be a hot growth stock to consider. I’m also encouraged by its plans to supercharge copper production to capitalise on the fast-growing green economy.

It plans to open several new red metal mines over the next few years, which it hopes will take annual copper production to 36,000 tonnes by 2028 from 15,000-15,500 today.

Any setbacks at the mine development stages could hit Anglo Asian Mining’s share price hard. But I think this is reflected in the company’s cheapness (it trades on a price-to-earnings (P/E) ratio of 6.1 times).

Royston Wild does not own shares in Anglo Asian Mining.

Animalcare Group

What it does: Animalcare Group develops and markets veterinary pharmaceuticals and identification products.

By Mark Hartley. The AIM-listed veterinary pharmaceutical and identification group Animalcare (LSE: ANCR) looks like an intriguing small-cap investment to me. Earnings have exploded recently, leading to a six-fold increase in its net margin. This was driven by strategic divestments, including the sale of Identicare and a minority stake in STEM.

However, debt has also skyrocketed to £23.16m, almost double that of its available cash. For now, it’s sufficiently covered by equity — but could be at risk if profits slip. Being a small-cap, it may also experience higher volatility and lower liquidity compared to larger firms.

With the price slow to catch up with earnings, it has a forward price-to-earnings (P/E) ratio of only 16, which is well below the sector average of 40. This suggests it has more room for growth. It also boasts an attractive return on equity (ROE) of 36.62% — a reassuring sign of efficient management and profitability. 

Mark Hartley doesn’t own shares in Animalcare Group.

Central Asia Metals

What it does: Central Asia Metals is a base metals producer with copper operations in Kazakhstan and a zinc and lead mine in North Macedonia.

By Paul Summers. Small-cap stocks usually require even more due diligence than your typical FTSE juggernaut, especially when their share prices have been on a downward trajectory. Central Asia Metals (LSE: CAML) is a great example.

Sure, ongoing geopolitical concerns combined with lower demand for one of the metals it digs up doesn’t exactly paint a pretty picture. And the miner obviously has no control over either. 

But these feel like short-term headwinds. Demand for copper is expected to shoot up over the next decade as the world transitions to green energy at an increasing pace. This could eventually make the current valuation of seven times forecast FY25 earnings look like a steal.

In the meantime, the stock yields a monster 11.5% as I type. I’d prefer this to be covered to a greater extent by profit but at least the firm’s balance sheet looks solid for now. 

Paul Summers has no position in Central Asia Metals

International Personal Finance

What it does: This financial services company provides home and digital credit to over 1.7m customers in nine global markets.

By Charlie Carman. Many individuals struggle to access loans from mainstream banks. That’s where a firm like International Personal Finance (LSE:IPF) steps in.

The growth opportunity in lending to underserved credit customers is huge. The company eventually aims to claim 2.5m customers, representing a small fraction of the addressable market of more than 70m people across its target geographies.

Business is humming along nicely. In the first quarter, customer lending grew by 12%, driven by strong performances in Poland, Romania, Mexico, and Australia. Bolstering the investment case, a £15m share buyback programme is due to commence imminently, and shareholders also benefit from a mighty 7.4% dividend yield.

All lending businesses face risks. However, International Personal Finance has a riskier customer base than most, given its inability to access conventional credit. That shouldn’t be ignored, but a cheap valuation and plenty of room for expansion make the risks tolerable in my view.

Charlie Carman does not own shares in International Personal Finance.

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This number can be daunting for those looking to start their investing journey. With this in mind, I’ve selected three top AIM shares I think could look good in a starter portfolio.

Buying AIM shares might deliver market-beating returns. Be aware, however, that it might also be riskier than purchasing large- or mid-cap stocks on the FTSE 100 or FTSE 250 indexes. So investors should carry out thorough research when considering which stocks to buy.

The growth and dividend stock

Springfield Properties (LSE:SPR) is tipped to enjoy an 80% rise in annual earnings this financial year (to May 2025). This reflects recent improvements in the housing market and the builder’s successful efforts to raise margins.

Cost-cutting, land sales, and the end of low-margin legacy contracts meant gross margins rose 300 basis points higher during the first half, to 17.7%.

It’s important to remember that some of these are one-off factors. Furthermore, the homes market recovery could falter if economic conditions worsen, and/or interest rates stay around current levels.

But I still believe Springfield Properties remains an attractive stock to consider, and especially looking at its long-term prospects. Demand for its product could rise strongly as the UK population grows. Government efforts to build 1.5m new homes in the five years to 2029 should also boost the company.

I also like the look of the Scottish housebuilder as a dividend stock. Steps to mend the balance sheet mean cash rewards here are tipped to grow strongly over the next two years.

As a consequence, a dividend yield of 1.6% for this year leaps to 2.7% and then 4.3% for financial 2026 and 2027, respectively.

The value share

Base metals miner Central Asia Metals (LSE:CAML) provides super value based on predicted earnings and anticipated dividends.

For 2025, the company trades on a price-to-earnings (P/E) ratio of 8.1 times. Meanwhile, its corresponding dividend yield is 9.4%.

To put that into perspective, the average yield on FTSE 100 shares is way back at 3.5%.

Central Asia Metals produces copper from the Kounrad mine in Kazakhstan, along with lead and zinc at the Sasa complex in North Macedonia. As a consequence, its share price has soared recently as industrial metal prices (and especially copper values) have exploded.

Base metals are tipped by some analysts to keep rising, too. It’s important, though, to remember that commodity prices are notoriously volatile. Fresh fears over changing US trade policy, for instance, could pull metal values sharply lower again and whack miners’ revenues columns.

Yet from a long-term perspective, I think Central Asia Metals remains an attractive stock to consider. It’s my belief that copper, lead, and zinc demand will rise strongly on a range of phenomena, such as increasing investment in artificial intelligence (AI), the growing green economy, and rising infrastructure and housing spending across the globe.

The post Here’s a starter portfolio of AIM shares to consider for growth, dividends, and value! appeared first on The Motley Fool UK.

Tanking share price

Bioventix (LSE: BVXP) is arguably one example. Shares in the developer and commercial supplier of monoclonal antibodies have tumbled over 40% in the last 12 months. While some of this is likely the result of broader market concerns, a lot is surely down to the company overstating revenues by £327,000 as a result of a customer error. In reality, the firm’s actual revenues came in below market expectations.

This news has clearly shaken confidence and pushed the stock down to a multi-year low.

However, I reckon this could be a great time to think about loading up. As worrying as recent form has been, this is still a company that reeks of quality. Margins and returns on capital remain sky-high, thanks in part to having very few employees. While this has led to the shares trading at a premium to the wider market, the current price-to-earnings (P/E) ratio of 16 is already significantly lower than the firm’s five-year average of 27.

Half-year numbers — due on 24 March — will be worth reading. I reckon it will take only a small chink of light to get the shares moving in the right direction again.

Sales down

Another niche AIM-listed company to consider that’s been battered is laser-guided equipment manufacturer Somero Enterprises (LSE: SOM). Its share price has fallen nearly 20% in 2025 already.

So what’s gone wrong here? Well, investors have become increasingly concerned about the general economic outlook, particularly in the US (where the company’s based) which makes up three-quarters of sales. There’s a chance that things will go from bad to worse if interest rates stay higher for longer and force clients to delay purchasing the company’s cement-levelling tech.

Like Bioventix however, this is another small-cap that scores consistently well on quality metrics. Supported by a strong balance sheet and very experienced management, Somero is also a market leader in what it does. Although never guaranteed, the dividend yield currently stands at a meaty 6.8% too.

Monster dividend yield

A final AIM stock that’s worth pondering is base metals producer Central Asia Metals (LSE: CAML). Like the other two mentioned here, its shares have fallen in recent times, down 14% or so in the last 12 months.

Again, much of this appears to be the result of general geopolitical concerns. That said, demand for lead has been lower. The company drills for this (and zinc) at its mine in North Macedonia. It also has copper operations in Kazakhstan.

On a more positive note, the shares now yield an incredible 10% for FY25. Quite whether investors will see all of this cash is open to debate if costs continue to rise. However, the total dividend is expected to be covered by profit as things stand. The stock looks very cheap too, changing hands at a P/E of just seven for FY25.

Full-year numbers are due tomorrow (20 March). It will be interesting to see how current holders react.

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Central Asia Metals

What it does: Central Asia Metals is a base metals producer with copper operations in Kazakhstan and a zinc and lead mine in North Macedonia.

By Paul Summers. Holders of shares in Central Asia Metals (LSE: CAML) endured a volatile 2024. Starting the year at just over 150p a pop, the stock soared as high as 235p by May as the company benefited from strong prices and solid operational performance. However, this gain had all been lost by the end of December. As far as I can tell, this is due to general geopolitical concerns and lacklustre demand for lead. 

The shares now yield a monster 10% for FY25. Assuming analysts aren’t wrong, that would represent a good return on its own. On an optimistic note, profit is expected to cover this cash distribution and the balance sheet looks robust.

Although rising costs could prove problematic, a price-to-earnings (P/E) ratio of seven suggests quite a bit of negativity is already priced in. When sentiment for base metals improves, the stock could do very well.

Paul Summers has no position in Central Asia Metals.

Filtronic

What it does: Filtronic makes power amplifiers and transceivers that are used in the telecommunications, aerospace, and defence sectors.

By Ben McPoland. With a market cap of £232m as I write, Filtronic (LSE: FTC) is still a relatively under-the-radar UK stock. That said, it’s been a popular one recently, surging 172% over the past year.

This can be almost entirely put down to one word: SpaceX. That’s because Elon Musk’s reusable rocket company has been ordering components from Filtronic for ground stations that form part of its fast-growing Starlink satellite network.

In future, SpaceX intends to add tens of thousands more satellites to its mega-constellation. This could support years of rising sales at Filtronic, given its small size (less than £50m in revenue).

What could go wrong? Well, losing the SpaceX contract it signed last year would be extremely negative, as this key customer is now contributing around 50% of sales.

Also, the stock isn’t cheap, trading at a forward price-to-earnings multiple of 38.

Finally, the company doesn’t have a history of sustained revenue and earnings growth. That might be about to change, but there could be lumpiness as SpaceX orders ebb and flow in future.

Ben McPoland does not own shares in Filtronic.

OXB

What it does: OXB is a contractor that develops and manufactures gene cell therapies for biotech and pharmaceutical firms.

By Mark Hartley. OXB (LSE: OXB), previously Oxford Biomedica, is a UK-based contract development and manufacturing organisation (CDMO) specialising in cell and gene therapies. It was founded in 1995 as a spin-out from the University of Oxford and has evolved into a global leader in viral vector production, including lentivirus, adeno-associated virus (AAV) and adenovirus.

As a contractor, OXB relies on securing partnerships with biotech and pharmaceutical firms. If it loses out on contracts to competitors, its performance could be impacted. Although its net margin has improved recently, the company is not yet profitable. If full-year results for 2024 miss expectations, it could hurt the share price. 

But a recent trading update outlined expectations of 78% organic revenue growth for FY2024, based on increasing demand for their CDMO services. Plus, its order book nearly doubled since August 2024, indicating strong commercial demand. 

I expect it will become a global leader in its field.

Mark David Hartley owns shares in Oxford Biomedica.

TBC Bank

What it does: TBC Bank is listed on the FTSE 250 and provides financial services in Georgia and Uzbekistan.

By Royston Wild. TBC Bank (LSE:TBCG) doesn’t attract anywhere near the same degree of attention as FTSE 100 firms like Lloyds, Barclays and NatWest.

Yet this is a bank which — thanks to its focus on fast-growing Georgian and Uzbekistani markets — could provide far better shareholder gains.

Past performance isn’t a reliable guide to future returns. But TBC Bank’s 208% share price explosion over the last five years underlines its incredible investment potential.

By comparison, Lloyds’ share price has risen just 21% over the same period.

Given the  varying economic outlook for the UK and Georgia, I expect this outperformance to keep rolling on. While the IMF thinks Britain’s economy will grow 1.1% in 2025, Georgian GDP is tipped to expand a whopping 6%, continuing the trend of recent decades.

If accurate, earnings at TBC could soar as financial services demand rises. Pre-tax profit here leapt 15.8% over the course of 2024.

A deterioration in Georgia’s fragile political landscape could impact future growth. However, I believe this potential hazard is baked into the bank’s low price-to-earnings (P/E) ratio of 5.2 times.

Royston Wild does not own shares in any of the shares mentioned above.

Yu Group

What it does: Yu supplies gas and electricity to UK business customers and installs and operates smart meters.

By Roland Head. Yu Group (LSE: YU.) has delivered strong growth through a volatile period for energy markets.

Revenue has risen fivefold to £578m since 2019. Profitability has also improved, with operating profit rising from £3.5m in 2021 to £47m over the 12 months to 30 June 2024.

Yu is still run by its founder and 51% shareholder Bobby Kalar. I believe Kalar’s twin role as CEO and major shareholder means he’s likely to maintain tight financial discipline.

This is a key risk for energy suppliers. Yu is exposed to big swings in commodity prices, customer bad debt and the financial hazards of fixed price contracts.

Growing usage of smart meters, a new energy trading deal with Shell and falling bad debt levels suggest to me that Mr Kalar is managing this £252m business well.

If he can continue to do so, the reward for shareholders could be higher profits and generous dividends.

Roland Head owns shares in Yu Group.

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It’s not just blue-chip UK stocks that are currently tearing higher. Shares of all types and sizes are gaining value as market confidence in the British economy improves, bolstering demand for domestic assets.

Yet the London stock market’s still a great place to pick up bargains. Here are three whose low price-to-earnings (P/E) ratios and enormous dividend yields make them, in my opinion, worth a very close look.

The copper miner

A sinking red metal price has pulled Central Asia Metals (LSE:CAML) shares sharply lower since last spring. The danger isn’t over, either, as China’s economy splutters and the threat of new trade tariffs grows.

Yet I think copper stocks like this could rebound strongly over the long term. Demand for the versatile metal — as well as lead and zinc, which Central Asia Metals also produces — is still tipped to rocket in the coming decades, reflecting its important role in fast-growing industries like renewable energy, consumer electronics, and artificial intelligence (AI).

Central Asia’s near-29% stake in Scottish explorer Aberdeen Minerals also gives it exposure to the nickel and cobalt markets. Its investment last year provides added scope for to capitalise on the energy transition.

Today Central Asia Metals trades on a forward P/E ratio of 7.3 times with a 10% dividend yield.

The greetings giant

Times are tough for the UK retail sector. Rising inflation and weak consumer appetite is hampering revenues, while labour and energy costs are creeping higher.

But I believe Card Factory (LSE:CARD), whose forward P/E ratio is 6.2 times and dividend yield is 6.1%, is an attractive dip buy to consider.

The firm’s focus on the low-cost end of the greetings card market helps revenues remain stable in good times and bad. Like-for-like sales rose 3.7% during the 11 months to December. The company is also making strong progress in cutting costs to support earnings.

With Card Factory’s store rollout programme continuing, and the business entering the US market last year, I think long-term earnings could grow strongly.

The care provider

Rising UK inflation could also cause turbulence at Care REIT (LSE:CRT). As a real estate investment trust (REIT), its earnings are highly sensitive to movements in interest rates.

Yet I believe the uncertain rate outlook is more than baked into the trust’s low forward P/E ratio of 5.5 times.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

With the business also sporting an 8.8% dividend yield, it’s a bargain share I myself am considering buying. That large yield partly reflects REIT rules, which stipulate 90% or more of annual rental profits be distributed to shareholders.

As a major care home provider, Care REIT has considerable long-term growth potential as Britain’s elderly population steadily rises. Average weekly fees here leapt 6.5% over the course of 2024, and could continue to increase strongly as demand ramps up.

The post P/Es below 8 and dividend yields above 6%! 3 bargain UK shares to consider appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Associated British Foods

What it does: Diversified food, ingredients and retail group known for famous brands like Jordan, Twinings and Primark.

By Mark David Hartley. Associated British Foods (LSE: ABF) is a food and ingredients group and the world’s second-largest producer of sugar and baker’s yeast. It’s also the owner of the retail clothing brand Primark, which has been doing well lately. As an international firm, it risks losses from exchange rate fluctuations and regulations related to food safety, labour standards, and environmental protection. It’s also in a tough industry, with competitors like Premier Foods, Tate & Lyle, and H&M vying for their share of the market.

I think it’s a good value stock because it has low debt, a clean balance sheet, and a reliable dividend with a 2.5% yield. The price grew 88% in the past two years – recovering all pandemic-era losses – yet it’s still undervalued by 17% based on future cash flow estimates. In the next three years, earnings per share (EPS) and revenue are expected to grow by 25% and 10% respectively.

Mark David Hartley does not own shares in any of the companies listed.

Central Asia Metals

What it does: Central Asia Metals operates Kazakhstan’s Kounrad copper mine and the Sasa lead-zinc asset in North Macedonia.

By Royston Wild. Copper prices have fallen sharply in the second half of 2024 as demand worries have intensified. This downtrend could continue if core economic data from the US and China continues to underwhelm.

This has obvious risks for copper producer Central Asia Metals (LSE:CAML). The business produces the red metal in Kazakhstan, alongside other base metals in North Macedonia.

Yet I still find the value this AIM stock offers hard to ignore. It trades on a forward price-to-earnings (P/E) ratio of 9 times. Meanwhile, its price-to-earnings growth (PEG) multiple is 0.3, well below the accepted value watermark of 1.

Central Asia Metals provides a bumper 9.6% dividend yield for this year, too.

As a long-term investor, I’m prepared to accept a little near-term turbulence if the outlook further out is bright. And I think Central Asia Metals’ profits could leap as the energy transition drives copper demand higher.

Analysts at McKinsey & Company forecast global copper consumption to surge 30% between 2023 and 2035. At the same time, supply is set to lag as new projects fail to start up and output from existing assets dips.

Royston Wild does not own shares in Central Asia Metals.

JD Sports Fashion

What it does: JD Sports Fashion is a global retailer of sports fashion brands. 

By Paul Summers: There’s not a lot of love for retailer JD Sports Fashion (LSE: JD.) among investors right now. The stock has seriously lagged the FTSE 100 index in 2024 so far.

Not that this comes as a complete surprise. A cost-of-living crisis was never going to be great news for consumer cyclical stocks. The fact that one of the company’s major brands – Nike – is struggling only worsens things.

However, adjusted profit of £405.6m for the six months to 3 August beat market expectations. With the all-important festive shopping season on the way, the second half of JD’s financial year might prove equally reassuring.

Sure, a rebound in inflation could bring out the sellers again. But the valuation of just 10 times FY25 earnings (as I type) looks too low to me considering JD’s multi-brand, multi-channel offering and rapid overseas growth.

Paul Summers has no position in JD Sports Fashion or Nike.

NWF Group

What it does: NWF is a distributor of fuel, food and animal feeds primarily in rural parts of Britain.

By Christopher Ruane. Shares in NWF Group (LSE: NWF) have fallen by 45% since last Summer and it now trades on a price-to-earnings ratio of 8.

But the company’s most recent trading statement affirmed that the current financial year has started in line with management expectations.

One reason for the decline is weakening business performance. Last year saw revenues fall 10% and pre-tax profit by 35%. Weak demand in the fuel market is an ongoing risk to the company’s performance.

But I think the share price fall looks overdone. NWF has a sizeable customer base and limited competition in some areas. Although profit margins are thin, it remains profitable and last year continued its recent pattern of annual dividend increases.

The yield of 5.5% is attractive in my view. I expect medium-term growth prospects could be limited, but like both the income prospects and what I see as a cheap valuation.

Christopher Ruane owns shares in NWF Group.

Zigup

What it does: Zigup operates van hire businesses in the UK and Spain. The group also provides accident repair and claims management services.

By Roland Head. When supply chain problems made it hard to buy new vans in 2022 and 2023, Zigup (LSE: ZIG) profited from soaring used van prices.

The group’s hire fleet feeds into its used van business, supporting bumper profits on sales of ex-rental vans. However, the shares have drifted lower this year as management have warned of a “normalisation” of used vehicle prices.

The risk here is that the normalisation may turn into a slump. I can’t ignore the possibility.

However, Zigup’s Northgate van hire business is a market leader and has been around a long time. I suspect they’ll manage this transition successfully.

In the meantime, the shares trade on a modest rating of seven times 2024/5 forecast earnings. Zigup also offers a useful 7% dividend yield, well covered by earnings.

I think the balance of risk and reward looks favourable. Zigup is on my radar as a possible value buy.

Roland Head does not own share in Zigup.

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