I do love a good bargain. Just like investing guru Warren Buffett, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down“. So today I’m looking for the greatest FTSE 100 and FTSE 250 value stocks that investors like me should consider.
Here are two of my favourites.
TBC Bank
TBC Bank (LSE:TBCG) shares have been up and down like Tower Bridge in 2024. Trading remains strong, with latest financials showing loan growth up 17% in quarter three. But investors are wary of political upheaval in the bank’s core market.
Shares jumped in November as tensions between Georgia’s pro-EU and pro-Russian politicians calmed. But on Friday (29 November) they slumped again as the government suspended talks to join the EU, sparking fresh civil unrest.
Meanwhile, claims of corruption in October’s general election continue to simmer. Investors need to be prepared for further turbulence in TBC Bank’s share price.
Yet, at the same time, I think this possibility is baked into the company’s low share price. At £30.17 per share, the FTSE 250 bank trades on a forward price-to-earnings (P/E) ratio of 4.9 times.
To put this in context, this makes it cheaper than other emerging market-focused banks like HSBC (7.1 times), Standard Chartered (7.8 times), and Santander (5.8 times).
With the bank also carrying a large 6.8% dividend yield, I think it’s worth serious attention from value investors today.
Taylor Wimpey
Housebuilders such as Taylor Wimpey (LSE:TW.) also face substantial uncertainty heading into the New Year.
Just a few months ago, a slew of potential Bank of England rate cuts seemed imminent. But stickier inflation in recent months mean this isn’t as certain as first appeared, casting a cloud over new homes demand next year and Taylor Wimpey’s revenues.
At the same time, rising construction costs seems to pose a growing threat to the homebuilders. Both Persimmon and Vistry‘s share prices tanked last month as they warned of soaring build expenses.
Still, the cheapness of Taylor Wimpey’s shares is hugely appealing to me. At 129.8p, they trade on a price-to-earnings growth (PEG) ratio of 0.5.
A reminder that any sub-one reading suggests a share is undervalued relative to estimated profits.
On top of this, the builder’s dividend yield is a vast 7.2%. This is exactly double the FTSE 100 average of 3.6%.
While the housing market could experience fresh hiccups in 2025, for the moment things are looking good for Taylor Wimpey.
Property listings website Zoopla said on Friday that “[the] housing market has now largely adjusted to higher borrowing costs“. It consequently predicted home sales to rise 5% year on year in 2025, and for average property values to improve 2.5% year on year.
I already own shares in several housebuilders like Taylor Wimpey. If I didn’t, I’d add this Footsie value hero to my portfolio this December.
This post was originally published on Motley Fool
