2 dirt cheap shares for a diverse investment portfolio!

We all want to pick up cheap stocks. Well, I mean stocks that are undervalued rather than companies that are cheap for a reason. Today, I’m looking at two stocks from very different sectors. Both trade at relatively attractive prices.

Let’s take a closer look!

Legal & General

Legal & General (LSE:LGEN) is a blue-chip FTSE 100 stock, and trades with a price-to-earnings ratio of just 7.2. That’s almost half the index average.

The company is clearly not cheap for a reason, but in recent years investors have been disappointed by the growth in its share price. In fact, the stock is down 10% in one year, and down 20% in three years.

The multinational financial services and asset management company has a brand that is recognized by millions. Combined with strong demand and a history of being a well-run business, it’s very profitable.

Currently, the yield sits at 7.25%. Last year, the dividend coverage ratio — a metric that shows how many times a company can pay dividends out of net income — was 1.85. It’s pretty safe, and has a track record for dividend growth.

The low valuation may reflect concerns about the company’s credit risk and the UK economy which could lead to underperformance. However, since these concerns were first raised, we have observed improving prospects for the British economy.

In short, it’s big business. There is a positive trend in annuity purchases, while pension risk transfer (PRT) is one of the market areas experiencing explosive growth. Companies are increasingly turning to Legal & General to manage defined benefit (DB) pension plans.

With a positive outlook for growth, an attractive valuation, and excellent results, it’s a strong buy for me. I recently increased my shares in a British company.

NIO

And now it’s time for something completely different. NIO (NYSE: NIO) is a Chinese electric vehicle (EV) manufacturer that has all the hallmarks of an incredibly successful business.

The Shanghai-based company is a promising range of vehicles, and they compete Tesla for coverage. It also looks like the market leader for driver technology.

NIO also uses a unique battery swapping technology, which allows drivers to replace a fully discharged battery in minutes. I think this could accelerate the company’s growth into the lucrative European market – the second largest EV market in the world.

The company has yet to turn a profit – few EV companies are still around. But when we look at the EV-to-Sales ratio, we can see that NIO’s value is quite attractive. NIO trades with an EV-to-Sales ratio of 1.9, versus Tesla at 7.6 and Lucid at 43.

NIO has been on a Tesla-esque growth curve, has access to a considerable indigenous market, and it’s battery-swapping technology should propel its movement into new geographies. Remember, battery swapping will also be a profitable activity in the future.

I am already a NIO shareholder, but would buy more at current prices if I had spare cash.