February is a great time for investors to consider adding some FTSE 100 shares to their portfolios, and Charlie Carman has identified three shares that may be especially attractive due to their low prices.
These three stocks, all from the UK’s premier stock index, are currently trading at prices that are well below their historical averages, making them potentially good value buys even as the FTSE 100 index sets new record highs.
Here are three stocks that look cheap to me today.
British American Tobacco
British American Tobacco (LSE: BATS) is an attractive FTSE 100 stock for acquisition in February and a great way for investors to increase their passive income. The share price has dropped 6% over the last year, yet there are reasons to be bullish about this tobacco giant.
One encouraging indicator of potential growth is the fact that consumers of non-combustible products increased by 4.2m to 22.5m. Therefore showcasing the company’s ability to adapt to regulatory challenges and reinvent itself.
Additionally, British American Tobacco’s dividend rose 6% year-on-year. Making it a great choice for those looking to build their passive income portfolio with a yield of 7.27%.Thus creating a well FTSE average.
However, there are some headwinds impacting the stock price. This includes the absence of a new share buyback program. In addition also an exit from Russia. Despite these risks, I believe that British American Tobacco is currently undervalued. This is due to its commitment to gain so as to hit £5bn in revenue by 2025.
Rightmove
The news that a widely anticipated UK house price slump could be on the horizon has been worrying for those invested in Rightmove. Which is the leading property website in the United Kingdom.
While this might seem like bad news for Rightmove’s share price, I’m not so sure. Rental yields remain strong, and the company makes money from both letting agents as well as property sales.
With low debt levels, an 84% market share in its sector, and an impressive operating cash conversion of 101%, there are compelling reasons to invest in Rightmove. What’s more, investors can count on a handy 1.4% dividend yield from the stock.
Rio Tinto
Rio Tinto (LSE: RIO) is an important player in the FTSE 100 mining industry. I believe it could be a lucrative investment for those with some spare cash. Not only does it offer a huge 8.89% dividend yield, but there’s also potential for its share price to rise as well.
This is largely due to China’s economic reopening and expected stimulus measures to prop up its struggling real estate sector, as the country accounts for around 66% of global seaborne iron ore demand, which is a key component of Rio Tinto’s revenue.
Furthermore, copper plays an important role in the company’s overall income too. The metal boasts unique conductive properties that make it especially useful for renewable energy systems. Adding also electric vehicles, while political unrest in Peru – the world’s second-largest producer – has caused a disruption to supply. This could push copper prices higher over the long term.
Should you invest £1,000 in British American Tobacco right now?
If you are considering investing £1,000 in British American Tobacco. You may be wondering whether or not this is a wise decision at this time. It is important to do your research and understand the risks associated with investing in any company. This is especially those that are publicly traded.
British American Tobacco has been performing well recently, reporting good profits in their most recent financial statement. Adding also to increase their dividend payouts to shareholders.
However, it is always worth considering the current market conditions and any potential future changes that could affect your investment. Before investing, it is wise to consult a professional financial advisor with expertise in the industry. This is to make sure that it is a prudent decision given your particular financial situation.
With careful research and analysis of these companies’ financial statements, dividend policies, and other factors, investors can make an informed decision on whether these stocks should be included in their portfolios.
