One FTSE 100 value stock I'd buy and one I'd sell

currencies notes cash
currencies notes cash

There are many value shares across Britain's FTSE 100 index, but I reckon TUI Travel (LSE: TUI) could be one of the best.

In a bright trading update on Thursday, the holiday operator announced that it still expects to report at least a 10% year-on-year earnings improvement in 2017 thanks to the resilience being seen across the business.

TUI Travel said: "Whilst there are at times external factors which can create uncertainty in specific markets and destinations, we are confident that our balanced portfolio, content led growth strategy and integrated model leave us well positioned to continue to deliver against our plans."

The Footsie play advised that it had enjoyed an uptick in customer volumes for most of its destinations in the year to September 2017, and noted particularly strong demand for its Greece, Bulgaria, Croatia, Italy, Cape Verde and long haul holidays.

This has offset the impact of recent hurricane activity in the Caribbean and Florida on its full-year earnings expectations, it said.

In other news, TUI Travel cheered a 4% increase in the number of direct bookings and 7% rise in internet bookings. And the travel titan also celebrated an additional sales increase for its own hotel and cruise brands.

Jetting ahead

Despite the uncertainty created by events like Hurricanes Irma and Harvey, and the rise of terrorist activity in Europe, I believe TUI Travel is still a pretty safe bet for those seeking solid earnings growth, thanks to the breadth of its operations and improving traveller demand for package holidays.

And my optimism is backed up by encouraging broker forecasts. In fiscal 2017 the City expects the bottom line to swell 19%, and it expects the holidays giant to follow this up with a 9% rise next year.

Consequently it changes hands on a frankly splendid forward P/E ratio of 12.4 times. Meanwhile, the firm's bright earnings outlook is also expected to keep creating formidable dividends -- current estimates point to rewards of 66.8 and 72.9 euro cents per share this year and next, returning vast yields of 4.6% and 5.2%.

I reckon the sun-and-sea merchant is a brilliant big-cap right now, and particularly at current prices.

Sales strains

While Next (LSE: NXT) also appears to be a white-hot value pick, I reckon investors should disregard the retailer's low paper valuations given that conditions on the high street remain pretty scary.

Look, I acknowledge that retail sales in the UK have performed better than expected in recent months, culminating in the CBI's latest survey this week that showed the sales balance hit a two-year high of +42 in September.

But my scepticism over Next's long-term profits outlook remains undimmed given that inflation continues to creep up, wage growth remains all-but absent for millions of Britons, and the geopolitical uncertainty currently washing over the UK looks set to persist.

With the FTSE 100 business also battling against rising competition and increased costs, the City expects earnings to keep on falling, and losses of 8% and 1% in the years to January 2018 and 2019 are currently predicted.

I believe these sorry forecasts could be set for swingeing downgrades too, and so a forward P/E ratio of 12.9 times is still not low enough to convince me to invest.

Hot dividend shares to help you retire rich

Rather than taking a chance on the likes of Next, I strongly recommend you check out this totally exclusive report that identifies a broad selection of FTSE 100 dividend stars.

The Motley Fool's 5 Shares To Retire On wealth report highlights a selection of incredible stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical and utilities plays that we are convinced should keep shelling out red-hot dividends.

Click here to download the report. It's 100% free and can be sent straight to your inbox.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.