UK Markets open in 5 hrs 30 mins
Property:

Homes with secrets and hidden surprises

All of these properties have a little extra something that you don't normally find in a home

4 FTSE 100 value shares. Should I buy them in March?

Royston Wild
·3-min read
Young Caucasian woman holding up four fingers
Image source: Getty Images

These FTSE 100 shares trade on forward price-to-earnings (P/E) ratios below the index average of 15 times. Should I buy them for my investment portfolio this month?

Tesco

Britain’s biggest retailer has the best online operation of all the country’s established supermarkets. This could deliver strong and sustained profits growth as grocery e-commerce gains momentum.

But I’m not tempted to buy Tesco shares today. Earnings are in severe danger in the short-to-medium term as shoppers cut back on food and other essentials. Ocado’s decision to hit pause on two new fulfilment centres illustrates the growing strain on supermarkets.

Tesco also faces mounting competitive pressures as discounters Aldi and Lidl expand. I won’t buy the business despite its low prospective P/E ratio of 14.3 times.

B&M European Value Retail

I think buying value retailers could be a better idea. This is why B&M is on my FTSE 100 shopping list.

Data from Kantar Worldpanel showed that food price inflation hit record highs of 17.1% during the four weeks to 19 February. High inflation looks set to persist too, as fruit and vegetable supply problems worsen.

In this landscape, B&M — whose like-for-like sales jumped 6.4% at its own-branded stores in the December quarter — can expect to continue snapping up customers.

The business trades on a forward earnings multiple of 12.9 times today. I think it’s a top buy despite the problem of cost inflation.

SSE

UK economic data has been more encouraging of late. Yet the outlook remains highly uncertain as high inflation persists and the Bank of England hikes rates.

For this reason I’ll buy shares in renewable energy provider SSE, if I have cash to spare. Demand for power remains broadly stable at all points of the economic cycle. So profits here should remain robust, regardless of the direction of Britain’s economy.

I’m also attracted to the FTSE 100 business because of its focus on renewable energy. Okay, earnings could suffer when the wind fails to blow. But it could also provide profits with a significant long-term boost as the UK moves towards net zero.

SSE’s share price trades on a forward P/E ratio of 10.1 times today. It also carries a corresponding dividend yield of 5.4%.

NatWest Group

High Street bank NatWest is the cheapest of all the FTSE index shares mentioned here. It trades on a forward P/E ratio of 6.9 times for 2023. It also carries a fatty 6.1% dividend yield.

Encouragingly, the company is investing heavily in digital banking to capitalise on the online revolution. This month it announced plans to buy a majority stake in savings and pensions fintech business Cushon for £144m.

As the world becomes increasingly digitalised this could pay off handsomely. Yet I’m not tempted to buy NatWest shares right now. Near-term profits remain under threat as the UK economy splutters. And rising competition from challenger banks is a massive long-term problem it has to overcome.

The post 4 FTSE 100 value shares. Should I buy them in March? appeared first on The Motley Fool UK.

More reading

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value and Tesco Plc. 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.

Motley Fool UK 2023

Latest stories

  • 3 mind-blowingly cheap shares to buy in April

    Know for their cheap prices, UK shares just got cheaper amid the banking chaos. As such, here are three of the best to buy in April. The post 3 mind-blowingly cheap shares to buy in April appeared first on The Motley Fool UK.

  • Morrisons starts £700m cost cutting drive as it struggles to grow sales

    Morrisons has pledged to slash its costs by £700m as it grapples with a £5.9bn debt pile and tepid sales.

  • 3 top dividend shares to consider buying for April and beyond

    A record of growing annual dividends tends to go hand in hand with other value indicators, such as those found with these three shares. The post 3 top dividend shares to consider buying for April and beyond appeared first on The Motley Fool UK.

  • 7% yield! 1 of the top dividend shares to buy in April

    High yields can be a warning sign, but there are exceptions. And these cheap dividend shares look to be positioned for long-term income growth. The post 7% yield! 1 of the top dividend shares to buy in April appeared first on The Motley Fool UK.

  • A $3 Trillion Threat to Global Financial Markets Looms in Japan

    (Bloomberg) -- Read this in Japanese: ３兆ドルの日銀黒田レガシーが逆回転の恐れ、世界の金融市場に衝撃もMost Read from Bloomberg$52 Billion Chipmaking Plan Is Racing Toward FailureNew Yorkers Are Moving to These Three Florida Cities$335,000 Pay for ‘AI Whisperer’ Jobs Appears in Red-Hot MarketScotiabank Economist Excoriates Trudeau, Freeland Over $32 Billion Spending BoostFBI Releases Files on Ivana TrumpBank of Japan Governor Haruhiko Kuroda changed the course of global markets when he unleashed a $3.4 trillion firehose of Japa

  • Credit Suisse accused of aiding tax evasion

    Credit Suisse is continuing to help wealthy Americans hide assets from the taxman almost a decade after a unit of the Swiss lender pleaded guilty to tax evasion conspiracy, the US Senate Finance Committee has said.

  • The little-known tax rule taking £30,000 out of landlords’ pensions

    Landlords are missing out on thousands of pounds in pension income thanks to a little-known tax rule over two decades old. Buy-to-let investors can only save £3,600 of their rental income into their pension each year tax-free, thanks to a limit introduced in 2001. If this cap had risen in line with inflation, it would be worth more than £6,000 today – almost twice as much.

  • 3 great FTSE 100 shares I’d buy in April

    Our writer examines a trio of FTSE 100 shares to buy for his portfolio in April. He thinks they offer a combination of growth and income. The post 3 great FTSE 100 shares I’d buy in April appeared first on The Motley Fool UK.

  • Banking industry's 'near-death experience' to send US economy into recession

    The US is heading towards a "crash landing" after the "near-death experience in the US banking sector", economists predict.

  • £2bn poured into NS&I as savers seek security on deposits

    Experts suggested people could be turning to Government-backed accounts to feel their money is secure amid global banking jitters.

  • Here’s how I’m diversifying with UK shares to aim for stunning returns!

    Investing in UK shares remains an effective way for individuals to diversify their portfolios. I've chosen to buy FTSE 100 stocks to spread my risk. The post Here’s how I’m diversifying with UK shares to aim for stunning returns! appeared first on The Motley Fool UK.

  • This large-cap trust’s 40 years of uninterrupted dividend growth highlights its income appeal

    One of the most difficult aspects of investing is maintaining a long-term focus. It is particularly challenging to think many years ahead when the short-term prospects for the stock market are highly uncertain.

  • Pension or buy-to-let: Which is best to fund your retirement?

    Property or pension, which is best? Thousands of workers in their 50s and 60s will spend years poring over this question in the run up to their retirement. The right decision could mean the difference between thousands of pounds in income, not to mention a good night’s sleep knowing that your money is safe.

  • 5 reasons the market might be undervaluing this FTSE 250 stock

    FTSE 250 stock Marks and Spencer looks cheap based on earnings multiples and other qualitative factors. Is the market overlooking this? The post 5 reasons the market might be undervaluing this FTSE 250 stock appeared first on The Motley Fool UK.

  • How much can you earn before paying tax? Personal tax allowance rates explained

    As a new tax year looms we look at income tax rates and personal allowances. Are there any tax breaks you could claim?

  • Home prices will fall 15% over the next year as high interest rates squeeze the housing market, economist says

    Home prices will keep coming down as high mortgage rates help dampen demand, according to Pantheon Macroeconomics.

  • Here’s the dividend forecast for Barclays shares in 2023 and 2024

    Bank shares such as Barclays are a great way to earn passive income. So, what are the forecast dividends for it in 2023 and 2024? The post Here’s the dividend forecast for Barclays shares in 2023 and 2024 appeared first on The Motley Fool UK.

  • Here’s the Rolls-Royce dividend forecast for 2023 and 2024

    Edward Sheldon looks at the Rolls-Royce dividend forecast for the years ahead. Are payments to shareholders on the cards now that profits are rising? The post Here’s the Rolls-Royce dividend forecast for 2023 and 2024 appeared first on The Motley Fool UK.

  • A once-in-a-decade opportunity for huge Stocks and Shares ISA returns?

    The Stocks and Shares ISA deadline is fast approaching. Could this be a rare opportunity for our writer to invest for long-term gains? The post A once-in-a-decade opportunity for huge Stocks and Shares ISA returns? appeared first on The Motley Fool UK.

  • Banking Chaos Creates ‘Once-in-a-Decade’ Bond Buying Opportunity

    (Bloomberg) -- Global credit investors are jumping back into bank bonds following a sector-wide rout — though concerns about additional tier 1 debt remain.Most Read from BloombergTrump Is Indicted in New York Over Stormy Daniels Hush-Money Payments$52 Billion Chipmaking Plan Is Racing Toward FailureNew Yorkers Are Moving to These Three Florida Cities$335,000 Pay for ‘AI Whisperer’ Jobs Appears in Red-Hot MarketA $3 Trillion Threat to Global Financial Markets Looms in JapanMoney managers from T.