The FTSE 100 has been smashed and I think these dividend stocks are bargains

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The FTSE 100 has had a pretty torrid month and a half, due mostly to US market weakness and Brexit uncertainty. Back in early October, the index was trading above the 7,500 mark. However, earlier this week, it fell to just over 6,900 points, meaning that it’s declined around 8% in a very short period.

Scanning the FTSE 100 today, I’m seeing plenty of value on offer after the recent drop. Not only are some Footsie stocks trading at bargain P/E ratios, but the yields on offer from some are simply incredible. Here’s a closer look at two FTSE 100 stocks that I believe offer excellent value at present.

DS Smith

Regular readers will know that I’m bullish on the long-term prospects of packaging sector, due to the vital role it plays in e-commerce. And one of my favourite picks in this sector is £4.7bn market-cap DS Smith(LSE: SMDS). The group is a leading manufacturer of consumer packaging, counting Amazon UK as one of its key customers, and operates in 37 countries globally.

Less than six months ago, DS Smith shares were changing hands for around 530p. Yet now, they can be picked up for 340p, which I think is steal. At that price, the stock’s forward P/E is just 9.2, and the prospective dividend yield is a healthy 4.6%.

News coming out of the company continues to be positive and, earlier this month, the group advised that it expects adjusted operating profit for the most recent half-year to be “materially ahead” of the comparable period. That’s due to good volumes in its resilient fast-moving consumer goods (FMCG) focussed business. It also advised that its recent acquisition of Interstate Resources continues to go “very well.”

Investors have dumped the stock recently on concerns over increased competition from Chinese rivals and a supply glut in the US. Yet I don’t believe these issues are too worrying for patient, long-term investors. With a yield of nearly 5% on offer, I see considerable investment appeal here.

easyJet

Another FTSE 100 stock that has been pummelled recently is low-cost airline easyJet(LSE: EZJ). Its shares are down from near 1,800p in late June, to just 1,140p today. To be honest, with the amount of Brexit uncertainty that exists right now, I’m not surprised that investors have recently dumped the stock. At this stage, we don’t even know if planes will be allowed to take off for Europe come 29 March 2019. That said, I think it could be worth looking past the short-term uncertainty here, and focusing on the long-term story.

EasyJet’s full-year results released earlier this week were impressive. The airline flew a record number of passengers last year (88.5m), with a record load factor of 92.9%. And these figures helped boost total revenue by 16.8%, and headline profit before tax by 41.4%. The group hiked its dividend by an impressive 43%, to 58.6p, signalling confidence from management. CEO Johan Lundgren said he was confident that the airline was well prepared for either a deal or a no-deal Brexit scenario.

With the shares now yielding in excess of 5%, and trading on a forward P/E of just 9.7, I see value on the table here for long-term investors.

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Edward Sheldon owns shares in DS Smith. The Motley Fool UK has recommended DS Smith. 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.

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