3 cheap FTSE 100 shares to buy in February!

I’m searching for the best cheap FTSE 100 stocks to buy this month. Here are three top blue-chip UK shares on my radar right now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

The BAE Systems (LSE: BA) share price soared in January before solid profit taking trimmed monthly gains. I think the FTSE 100 defence giant could rebound strongly as speculation over Ukraine military action mounts.

The geopolitical landscape is becoming increasingly tetchy and in this sort of environment demand for weapons systems rises. Even if war in Eastern Europe is averted, BAE Systems’ hardware will remain in high demand following this latest spat with Russia. China’s support for Moscow’s “legitimate security concerns” in recent days has escalated concerns among Western powers even further.

Problems with project delivery are an ever-present that could damage orders for BAE Systems’ technology. But the company’s strong record on this front provides me with peace of mind. Today, the company trades on a forward P/E ratio of 11 times while it boasts a chunky 4.4% dividend yield too. I think it could be a great addition to my investment portfolio today.

Should you invest £1,000 in BAE Systems right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BAE Systems made the list?

See the 6 stocks

6.5% dividend yield!

I believe Barratt Developments (LSE: BDEV) is another excellent FTSE 100 stock to buy this month. The rising cost of living and the slowing UK economy are problems that could hit homes demand in 2021. But, as things stand, the domestic housing market looks rock solid

In fact, Nationwide says the housing market has made its strongest start to a year since 2005. The building society says average home prices soared 11.2% in January to £255,556. This provides me with confidence looking ahead.

I already own shares in Barratt and I’m thinking of buying more, given that it still looks dirt-cheap. The builder trades on a forward P/E ratio of just 8 times. It also boasts a monster 6.5% dividend yield.

I expect Barratt to prove a canny investment over the long haul. I think lower-than-usual interest rates will remain in place to support buyer affordability. I’m also confident that schemes such as Deposit Unlock and Shared Ownership will keep the market healthy, despite the withdrawal of Help to Buy next year, allowing first-time buyers to continue getting a foot on the property ladder.

A FTSE 100 retail winner

The rising strain on consumer wallets could also make B&M European Value Retail (LSE: BME) a great share to own right now. Inflation is crushing consumer spending power and the strain looks set to intensify in April as tax hikes come into being and energy costs rocket.

This is playing into the hands of value retailers. And B&M, with its 700-strong store network is well-placed to capitalise on this trend. Kantar Worldpanel says the average yearly food bill is set to rise by £180, illustrating that Britons face a stretch their shopping budgets.

Today, B&M trades on a prospective P/E ratio of just 13.8 times. I think this is good value, given the company’s enormous sales opportunity. I’d buy it despite the company’s lack of an e-commerce channel. This could see it lose out to retailers such as Tesco and Amazon with their digital strength, for example.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild owns Barratt Developments. The Motley Fool UK has recommended Amazon, B&M European Value, and Tesco. 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.

More on Investing Articles

This way, That way, The other way - pointing in different directions
Investing Articles

Prediction: in 12 months the under-achieving Legal & General Group share price could turn £10k into…

Harvey Jones expected better from the Legal & General share price, but he has no complaints about the FTSE 100…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

See the latest BP share price and dividend forecasts

Harvey Jones examines the outlook for the BP share price after what's been a tough year. The yield's climbed nicely…

Read more »

A GlaxoSmithKline scientist uses a microscope
Investing Articles

What are the most common FTSE 100 shares top UK investors put into a Stocks and Shares ISA?

Mark Hartley reveals the three most popular FTSE 100 shares found in Stocks and Shares ISAs — and why so…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

£10,000 invested in Greggs shares would deliver this much passive income…

Dr James Fox takes a closer look at Greggs' shares. He hasn't been a fan of the sausage roll maker…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

11% below its highs, this world-class FTSE 100 tech stock looks good value to me

Looking for a tech stock in the FTSE? This company is now one of the biggest financial data companies in…

Read more »

British Asian mother and young children enjoying exercise
Investing Articles

Here’s how my 1 year-old daughter’s SIPP could be worth almost £19m in 60 years

The SIPP provides Britons with a way to manage their retirement planning. Plus, you can open a SIPP at any…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

Consider 2 investment trusts and funds to target £160k from a £20k lump sum!

I think these investment trusts and ETFs could continue delivering double-digit annual returns through to 2035. Here's why.

Read more »

Shot of an young mixed-race woman using her cellphone while out cycling through the city
Investing Articles

How investors can aim to get rich and retire early by following Warren Buffett

Warren Buffett is an exceptionally successful investor, who has leveraged his knowledge and the power of compounding to create great…

Read more »