After big falls, these FTSE 100 stocks look dirt-cheap!

FTSE 100 stocks tend to trade at a discount versus their US counterparts. There are a number of reasons for this, including a lack of typical growth stocks on UK exchanges, and broad negativity about the health and future of the UK economy.

But after the March stock market correction, which rocked financial stocks more than most, I’m seeing more value than ever before. So today, I look at some of the lowest performing stocks in the FTSE 100 after the downward pressure of March.

Barclays

Barclays (LSE:BARC) is one of the lowest performing stocks in the index. It currently trades at a price-to-earnings ratio of just 4.7. It is less than half the index average.

Stocks fell on the back of the Silicon Valley Bank (SVB) fiasco. This situation is largely exacerbated by the implosion of Credit Suisse and its takeover UBS.

Investors are increasingly worried about unrealized bond losses after SVB was forced to sell low-yielding bonds at a loss after its technology-focused deposit base began to retreat.

But Barclays, like other big banks, has no need to sell bonds, even if prices fall. This is because the bank serves a wide range of individuals and businesses – not just the technology sector – and liquidity is strong. However, my main concern is the impact of current very high rates on debt and disability costs.

Refocusing on its value, the calculation of Discounted Cash Flow (DCF) shows that the bank can be undervalued by up to 73%. This is definitely an incentive to invest. And with the share price down, we’re now looking at a 5% dividend yield.

I bought more shares of Barclays as the share price started to recover. For me, it is very undervalued and concerns about the loss of bonds are misplaced. It is a frequently stress-tested company and its liquidity coverage matches that of Europe’s top banks.

The Phoenix Group

The Phoenix Group (LSE:PHNX) is the UK’s largest long-term savings and pensions business. The group manages regulated life companies in the UK, including Phoenix Life, a private life insurance business that includes Phoenix Life and Phoenix Life Assurance and Phoenix Wealth, among others.

Their business model involves buying and managing closed businesses to maturity. For example, in 2018, Phoenix Group agreed to acquire Standard Life Assurance from Standard Life Aberdeen for £2.9bn. It is a model that has proven to be very successful.

Phoenix Group shares also fell in March. The stock currently trades at a price-to-earnings ratio of 6.6, nearly half the index average.

It recently announced that, on an IFRS basis, adjusted operating profit for 2022 rose slightly to £1.24bn, up from £1.23bn in 2021, while assets under administration fell to £259bn from £310bn in a volatile market. Recent market volatility has not helped Phoenix Group. I’m a bit wary that assets under administration could go down again this year.

One of the most interesting parts about Phoenix Group is its 9.3% dividend yield. The dividend was recently raised for 2022, and the coverage ratio is 1.6. That could be higher, but it doesn’t make me worry about the results.

I recently topped this stock after it fell. The median analyst share price forecast suggests a 26.28% upside from the current 547p. I buy to yield and share price growth.