3 FTSE 100 stars trading far too cheaply! AstraZeneca plc, Legal & General Group plc and Berkeley Group Holdings plc
Today I'm looking at three FTSE 100(INDEXFTSE: UKX) stars offering unmissable bang for your buck.
Insurance giant Legal & General(LSE: LGEN) has a long and distinguished record of offering splendid returns for both growth and income seekers. And the City doesn't expect this trend to cease any time soon.
The number crunchers expect Legal & General to follow the double-digit rises of recent years with less chunky expansion of 8% and 7% in 2016 and 2017, respectively. Still, the insurer's ability to keep grinding out new business in challenging market conditions is nothing short of impressive.
On top of this, these figures leave Legal & General dealing on P/E ratios of just 11.4 times for this year and 10.6 times for 2017, comfortably below the benchmark of 15 times that indicates attractive value.
And dividend investors will no doubt be impressed by predicted dividends of 14.2p and 15.3p for 2016 and 2017, figures that yield 6.1% and 6.6%. By comparison the big-cap average stands at around 3.5%.
Construction specialist Berkeley Group(LSE: BKG) is also expected to deliver stunning returns in the years ahead thanks to the state of the UK housing market.
Despite the prospect of slipping buy-to-let sales, as new levies and heightened lending restrictions loom, home prices are expected to keep rising amid surging first-time buyer demand and a huge housing stock shortage.
Like Legal & General, Berkeley Group has a terrific record of generating bottom-line growth year after year. And earnings are expected to explode a further 51% in the period to April 2017, resulting in an unbelievably-cheap P/E rating of 8.1 times.
And the multiple slips to 7.8 times for 2018 thanks to a projected 4% earnings rise.
Furthermore, a dividend yield of 6.2% through to the close of next year -- created by predictions of a 200p per share payment for 2017 and 2018 -- underlines Berkeley Group's position as a big-cap bargain, in my opinion.
Generate healthy returns
Pharma giant AstraZeneca(LSE: AZN) may not have proved a dependable selection like its blue chip counterparts mentioned above.
The impact of colossal patent losses on revenues-driving labels has seen AstraZeneca's bottom line sink in each of the past four years. And additional weakness is predicted for the medium term -- the City has pencilled-in earnings dips of 8% and 1% for 2016 and 2017.
Still, these figures create P/E ratios of 14.6 times and 15 times, respectively. And while this may not appear unmissable value -- at least on paper -- I certainly believe AstraZeneca's improving product pipeline makes it a great long-term pick at these prices.
Indeed, the Cambridge firm has enjoyed a string of positive regulatory approvals in recent months, including its Bevespi Aerosphere and Brilique lung and heart treatments in the US and Europe. And I expect earnings to explode in the coming years as healthcare investment gallops across the globe.
On top of this, a projected dividend of 280 US cents per share through to the end of 2017 should soothe income seekers. These forecasts yield a market-mashing 4.8%.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended AstraZeneca and Berkeley Group Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.