3 top FTSE 100 stocks I'd buy in March

Updated: 
Legal & General

The strengthening insurance sector is probably my favourite in the FTSE 100 right now, and we're heading right into its key reporting period. Keep your eye out for what I think are still bargain shares.

Motor insurance cash

With Admiral(LSE: ADM) shares at 1,888p you'd be sitting on a 79% price gain if you'd bought five years ago, with some tasty dividends to add to the pot. In fact, Admiral has been handing back surplus capital in the form of special dividends for a few years now and in 2015 it paid out an extra 29.8p per share in addition to its normal dividend of 33.6p.

Results for 2016 are due on 1 March, and shareholders have already received an interim dividend of 62.9p per share. Including special dividends, analysts are predicting 122p for the full year for a total yield of 6.5%, and we should see more of the same for 2017 and 2018.

How's business itself? The first half saw customer numbers growing steadily, leading to a 19% rise in turnover (to a new record), a 4% rise in pre-tax profit and a 2% boost to EPS. New chief executive David Stevens spoke of "the enduring, and indeed increasing, strength of the UK business" and "a step change upwards in growth from our developing international businesses".

More cracking dividends

Life insurer Legal & General Group(LSE: LGEN) has been rewarding shareholders well for years. Steady earnings growth has supported the ramping up of the company's well-covered dividend from 6.4p per share in 2011 to as high as 13.4p in 2015. Analysts expect a further hike to 14.4p for 2016, with results due on 8 March.

Over the same five-year period, the share price has doubled to today's 246p, so investors have enjoyed a handsome reward -- and I see no reason to doubt that we're in for another great five years.

In fact, I see Legal & General as one of those rare companies that truly has a long-term focus, and the ability to keep on generating cash for shareholders for decades to come. The company manages pensions, and I reckon its shares would be a profitable addition to anybody's pension investments.

What's more, Legal & General shares are priced on an undemanding P/E of 11, dropping as low as 10.6 on 2018 forecasts. That's way below the long-term average FTSE 100 P/E, and I think it's too cheap for such a well-managed company.

A recovery story

Finally we come to my own choice, Aviva(LSE: AV), whose 2016 results are due on 9 March. It was hit by the financial crisis and had to slash its dividend. But the firm embarked on a far-reaching restructuring, and those dividends started to creep up again in 2014 -- reaching a yield of 4% again by 2015.

Analysts are expecting a big rise in earnings for 2016, which would drop the P/E to a modest 11.5, with further growth forecasts depressing it as low as 9.6 by 2018. And if they're correct, we should see a dividend yield of 4.7% for 2016 being hiked as far as 5.6% by 2018.

At the halfway stage, chief executive Mark Wilson told us: "We are delivering consistent, stable and predictable growth despite challenging market conditions," with the firm growing its UK business nicely while at the same time getting 42% of its earnings from elsewhere.

Brexit risk is possibly behind Aviva's current low valuation, but I see solid long-term growth here -- and a nice dividend cash cow.

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Alan Oscroft owns shares of Aviva. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.