5 top value shares to buy in a stock market crash?

At FTSE 100 down almost 7% since breaking 8,000 points in February. Will we face a similar stock market crash in 2020? Well, I recently threw up some attractive value shares.

Today, I’m looking at five in the UK stock market that I’m considering buying right now. If the market were to go into crash mode, I think it would be even lower. So what are my criteria?

Evaluation

I want a fundamental valuation below the market average, and below the long-term trend of each stock. In this regard, I am mainly talking about the price-to-earnings ratio (P/E) and the dividend yield.

Both look better when stock prices are low. So, here are five ‘to buy’ watchlists.

Company	latest price	12 months change	5 years change	Fcast PE	Dividends produce
M&G	184 pp	-13%	-18%*	11	11%
ITV	83 pp	+0.3%	-43%	12.5	6.2%
International Distribution Services	230 pp	-38%	-57%	n/a	3.3%
Direct Line Insurance Group	147 pp	-47%	-61%	8.4	5.5%
Marks and Spencer	154 pp	-5.8%	-40%	9.4	3.0%

Think again

I changed my mind on this couple. For years, I didn’t see Marks & Spencer as a good buy. Why now? And would I be mad to buy retail stocks when inflation is so high?

Analysts increasingly think M&S has weathered tough times. We may be in for a tough 2023, but forecasters have earnings rebounding in the next few years.

And after two years of no dividend, they also suggest a very good return. I haven’t made up my mind about M&S, but the signs are there.

Change the name

I’m also bullish on International Distribution Services, even though I hate the name. In my mind, it would always be Royal Mail.

We saw an amazing recovery in share prices in 2020 and 2021. But then it fell again. This is another one where City residents expect strong earnings and dividend growth over the next few years.

If true, we could see a 2024 P/E of just eight, with a dividend yield of 5.5%.

Much depends on whether the company has really solved the industrial relations problem. And I’m cautiously optimistic there. This is definitely creeping onto my radar.

Financial stocks

Both of my picks are in the financial sector, although these stocks have given investors serious pain over the past decade. They may be facing short-term risks now.

M&G investment managers are sure to suffer in the stock market. But it’s worth putting it on the ‘buy’ list now. I might be one of the best stock market crash buyers around.

Direct Line is cutting its 2022 dividend after a tough year. But after the share price fell, the yield still looked attractive. And the forecast shows that it will come back strong.

All these dividends are at risk. But I think investors can get tasty long-term returns.