The banking crisis is my chance to buy these 2 cheap shares and I’m not going to miss it

A stock market dip is always a good time to go shopping for cheap shares, and the banking crisis has only thrown up buying opportunities.

Although in FTSE 100 has picked up over a day or two it is still trading more than 500 points below its all-time high. Some stocks are looking very cheap right now, including these two.

Now it seems like a good entry point

Shares in the UK’s largest housebuilder, Barratt’s Development (LSE: BDEV ), has fallen 21.34% over the last 12 months and now trades at just 5.3 times earnings. That’s cheap, even for a reason, of course. Analysts are gloomy about the outlook for the UK housing market, with some expecting a 10% or even 20% crash this year.

That’s worrying, but also an exciting opportunity for long-term buy-and-hold investors like me. If I had waited until the property market boomed before buying Barratt shares, I would have had to pay more than I do now. Plus, I would have missed out on dividends in the interim, and Barratt offers a very good 8.35% yield.

Although the Bank of England is expected to raise the base rate again tomorrow, we must reach the end of the cycle. If inflation and interest rates start to fall by the end of the year, homeowners will have some breathing room and house prices can recover. As Barratt will point out, if all goes well.

The risk is that the UK plunges into recession and house prices really crash, affecting buyer confidence and Barratt’s forward order book. If inflation remains high at the same time, it will increase input costs. But it’s an opportunity I’m looking forward to because of the attractive price point now and the minimum timescale of 10 years to hold the stock.

I will compensate by investing Legal & Insurance Group (LSE: LGEN), which is also cheap as Chips trades at 6.2 times earnings.

It’s all about dividends

The risk here is that L&G’s asset management operations will suffer if we experience a stock market crash. That will result in an inflow of clients and reduce the company’s profit from the annual management fee based on a percentage.

The danger is real but is partly reflected in the current low prices. L&G’s share price has fallen 12.8% over the past year, but this has impacted its dividend yield, which currently stands at 8.15%.

While higher yields may prove unsustainable, I’m not worried about it. Payments are now covered twice by earnings and the company has just increased its operating profit by 12% to £2.52bn.

Management is committed to the dividend, which has been steadily increased from 16.42p per share in 2018 to 19.37p in 2022. At the end of the year there was a 5% increase and L&G’s balance sheet looks strong, with a solvency ratio of 236%.

Given the recent growth in the share price, management will work hard to keep investors and maintaining a rising dividend is the best way to do so.

These are just two cheap FTSE 100 stocks to catch my eye these days. I am currently raising the money needed to buy both, and maybe one or two more.