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I’m searching for the best FTSE 100 bargain stocks to buy following recent market volatility. Here are three I’ll be looking to buy when I have spare cash to invest.
The following price-to-earnings (P/E) multiples and dividend yields are based on broker projections for the current financial year.
HSBC Holdings
P/E ratio: 6.4 times
Dividend yield: 7.6%
As a major player in Asia’s banking sector, HSBC Holdings is in great shape to profit from surging wealth levels there. Trouble in China’s real estate sector is a problem, but overall things look extremely bright in its core markets.
This is why the bank is selling assets in the West and diverting resources to these fast-growing regions. It’s spending $6bn between 2021 and 2025 in Hong Kong, Singapore and China. This is part of its plan to grow profits by double-digit percentages in the medium to long term.
HSBC has considerable brand strength to help it achieve its aims too. It was recently named the strongest consumer brand in Hong Kong by Kantar, for example.
Anglo American
P/E ratio: 9.6 times
Dividend yield: 4.3%
Mining businesses like Anglo American face trouble in the near term if raw materials demand remains weak. Prices of metals have shrunk in the year to date as China’s economy has struggled.
But I expect commodities producers to recover strongly from this current blip. Once economic conditions normalise, demand for metals is likely to soar for a variety of reasons. The renewable energy and electric vehicle sectors alone are tipped to suck up vast amounts of base metals alone.
This bodes well for Anglo American. It supplies a vast selection of metals that are critical for the green revolution, including copper, nickel and manganese.
What’s more, the company’s robust balance sheet gives it an opportunity to boost earnings through acquisitions and investment in existing assets. The FTSE firm’s net-debt-to-underlying EBITDA stood at just 0.9 times as of June.
Airtel Africa
P/E ratio: 9.3 times
Dividend yield: 4%
Consumer interest in Airtel Africa’s telecoms and financial services is soaring across its emerging markets. It’s currently the second-largest telecoms provider on the continent.
Over the 12 months to June, the firm’s customer base grew by 11.5m people to 143.1m. Meanwhile revenues (at constant currencies) leapt 20.4% to $1.4bn, reflecting rapid economic growth and increasing populations.
GSMA Intelligence predicts there will be an extra 100m mobile subscribers in the company’s Sub-Saharan territories between 2022 and 2025. Encouragingly Airtel is rapidly expanding to capitalise on this opportunity, too. Its 4G network continues to grow, while it also launched its mobile banking operations in Nigeria just last year.
Unfavourable currency movements can often damage earnings, but I still like Airtel shares today.
