FTSE 100 stocks continue to surge and, on Tuesday, Britain’s blue-chip index hit new record highs. At 7,995 points, the Footsie came within a whisker of breaking new critical levels.
Yet despite widespread price gains there remain many brilliant bargains for investors to buy. Here are two value stocks I think are too good to miss. I’ll be looking to add them to my own investment portfolio if I have spare cash to invest.
WPP
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Advertising spending is one of the first things to fall when economic conditions worsen. This leaves some uncertainty for ad agency WPP (LSE:WPP) in the short term.
But this is a risk I’d be prepared to take given its low price-to-earnings (P/E) ratio of just 9.8 times. I think WPP could actually surprise to the upside following the upgrade to forecasts it made in October.
I’m impressed by the results that its growing emphasis on digital marketing is reaping. Like-for-like revenues continue to accelerate and were up 10.9% in the third quarter of 2022 versus pre-pandemic levels.
Fresh business wins from new and existing blue-chip clients are also highly encouraging. They propelled net new business to $5.1bn between January and September, $500m higher from the same 2021 period.
Encouragingly WPP continues to rapidly expand to keep business rolling in, too. In January it acquired Fēnom Digital, a business it’s described as “one of the fastest growing digital transformation agencies in North America”.
As a long-term investor I’m very excited by the company’s aggressive acquisition strategy and think it could deliver tremendous returns. I don’t think this is reflected in its rock-bottom valuation.
One final thing: at current prices of 995p per share, WPP offers a juicy 4% dividend yield for 2023. This beats the FTSE 100 forward average of 3.5% by a decent margin.
Airtel Africa
Telecoms and mobile money operator Airtel Africa (LSE:AAF) also offers an attractive blend of low earnings multiples and big dividend yields. I think shareholders could make a lot of money from this UK share as telecoms demand balloons in its emerging markets.
At 127p per share, Airtel shares trade on a forward P/E ratio of 9.5 times today. They also carry a market-beating 3.7% dividend yield as an added bonus.
Forecasters at Analysys Mason have said that “sub-Saharan Africa continues to hold considerable potential for mobile services revenue growth due to the growing population, low mobile penetration and strong demand for data”.
This bodes well for Airtel, whose territories include heavyweight economies Nigeria, Kenya, and Tanzania. Latest financials this month illustrate the massive growth potential here. Customer numbers grew 10.2% in the nine months to December, to 138.5m. Revenues meanwhile soared 12.1% to $3.9bn.
Rising competition is a problem the company will have to overcome. But on balance I think its a top FTSE 100 share to hold right now.
