3 ‘Bargain Basement’ Stocks: WM Morrison Supermarkets PLC, Royal Dutch Shell Plc And Banco Santander SA

These 3 stocks could be worth buying right now: WM Morrison Supermarkets PLC (LON: MRW), Royal Dutch Shell Plc (LON: RDSB) and Banco Santander SA (LON: BNC)

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Morrisons

When focusing on companies that are enduring a challenging period, it can be prudent to check out their financial standing. After all, if they are going to mount a comeback then they will need adequate financial firepower to do so. And, on that front, Morrisons (LSE: MRW) seems to offer considerable potential as a result of its debt to equity ratio being just 65% last year.

This means that it is able to accommodate more debt onto its balance sheet in order to affect its turnaround plans and, with it trading on a price to book (P/B) ratio of just 0.97, its share price could be subject to  a considerable upward rerating moving forward. As such, now could be a great time to buy a slice of Morrisons.

Shell

Although a lower oil price is undoubtedly hurting Shell (LSE: RDSB), the company still has an excellent long-term outlook. That’s because it offers investors a mixture of relative stability and excellent value for money. For example, Shell remains one of the most diversified oil companies in the world and so, even if there are challenges faced in one part of the globe or in one of its operations, it has other regions and/or operations that can pick up the slack.

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In addition, Shell offers a yield of 5.3% and this indicates that its shares offer good value for money. Certainly, the price of oil could move lower in the short term but, realistically, in the long run the current level is unsustainable and market forces are likely to push it higher. As such, now could be a good time to buy Shell.

Santander

The last few weeks have seen major changes take place at Santander (LSE: BNC) (NYSE: SAN.US), with the largest bank in the Eurozone deciding to cut dividends as it seeks to strengthen its capital position. And, even though dividends are set to be cut by almost half next year, it still leaves Santander on a forward yield of 4.9%, which is highly appealing and also indicates that it offers good value for money at the present time.

In addition, Santander also has an excellent track record of profitability. It is one of the few European banks to remain in profitability throughout the financial crisis (even on a quarterly basis) and, looking ahead, this should provide investors in the bank with a degree of confidence regarding its future prospects. As such, now could be a good time to buy Santander.


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.

Peter Stephens owns shares of Morrisons and Royal Dutch Shell. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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