The FTSE 100 and FTSE 250 indexes are packed with terrific value stocks to buy in early 2024. This reflects years of underperformance on the UK stock market due to the country’s economic and political difficulties.
This leaves a great opportunity for eagle-eyed investors to nip in and grab a bargain or two. I myself am looking to buy M&G (LSE:MNG), Tritax Eurobox (LSE:EBOX), and DS Smith (LSE:SMDS) shares for my own Stocks & Shares ISA at the next opportunity.
| COMPANY | FORWARD P/E RATIO | FORWARD DIVIDEND YIELD |
|---|---|---|
| M&G | 9.7 times | 9.2% |
| Tritax Eurobox | 10.8 times | 5.4% |
| DS Smith | 8.4 times | 6.4% |
As the table above shows, these top stocks currently trade on price-to-earnings (P/E) ratios below the Footsie average of 11 times.
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They also carry dividend yields well above the FTSE 100’s 3.9% forward average. Here’s why they’re on my shopping list.
Recovery play
Investment manager M&G should receive a boost later this year when interest rates begin to fall. And over the long term, business should steadily increase as the world’s elderly population increases, driving demand for retirement products and other financial services.
I like M&G due to its wide geographic footprint that spreads risk and provides attractive opportunities for growth. I’m also a fan because of the firm’s excellent brand power that helps it to attract customers. Today it has more than 5m retail customers on its books.
The FTSE-quoted firm is vulnerable to a fresh slump on financial markets. Given the turbulent economic landscape and growing threat of conflict this scenario isn’t impossible. However, I believe this threat is more than baked into the company’s rock-bottom valuation.
Property powerhouse
Property stocks like Tritax Eurobox will also benefit from a fall in interest rates. However, this Europe-focused business may face stress in 2024 as conditions in core markets like Germany remain tough.
Having said that, this FTSE 250 firm’s long-term investment case remains highly attractive. So I’m considering buying its shares to boost my passive income. Demand for the warehouses and logistics hubs it owns and operates is tipped to rise strongly as e-commerce steadily grows and companies adapt their supply chain management.
Encouragingly for Tritax, a weak development pipeline across the industry suggests supply will fail to keep up with demand. Therefore the rates charged to tenants like Amazon and Wayfair look set to keep accelerating. Like-for-like rental growth hit 4.5% during the three months to September 2023.
Boxing clever
Boxmaker DS Smith is my final ISA pick today. Its products might be simple, but like Tritax Eurobox, it plays a vital role in the e-commerce boom. For this reason I’m tipping earnings here to rise strongly over the next decade.
DS Smith has other qualities that I like. It gives me exposure to fast-growing markets in Eastern Europe as well as more developed European and North American territories. It is also a leading supplier of packaging in the expanding food retail sector. And finally, it is doubling-down on sustainability to capitalise on booming demand for environmentally-friendly products.
I’m not put off by the tough retail climate and what it means for box demand today. I already own this FTSE 100 share in my portfolio, and its current rock-bottom valuation means I’m looking to increase my position.
