AAL, CNA, SHEL: Blue-chip value stocks under investors’ lens amid rising inflation

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Highlights

  • The inflation levels in UK have surged to 9.1% in May, as per latest data from ONS.
  • The Bank of England has been going for interest rate hikes, recently increasing the rate to 1.25%.

After hitting a 40-year high of 9% in April, inflation levels in the UK have surged to 9.1% in May, as per the latest data from the Office for National Statistics (ONS). Inflation is now approximately five times higher than the 2% target set by the Bank of England (BoE).

In this inflationary environment, while the households are under tremendous pressure, businesses are facing increased cost burden due to prevailing factors like supply chain disruptions, and rising fuel prices. The overall business investment has taken a hit and consumer confidence has also gone down amid rising food and fuel bills.

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In response to the soaring inflation, the BoE has raised the interest rate. Recently, the rate has gone up to 1.25%. Increasing inflation and interest rates are generally a headwind for growth stocks. However, value stocks, or stocks trading at values less than their real worth, have a propensity to comparatively perform better during such periods.

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Value stocks generally have a low Price-to-Earnings (P/E) Ratio with a price/earnings to growth (PEG) ratio of less than 1. Based on this criterion, UK investors can keep an eye on the following blue-chip value stocks. 

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Anglo American plc (LON: AAL)

The shares of the leading British metals producer, Anglo American plc, were trading at GBX 3,048.50, down by 0.41%, at 4:30 PM (GMT+1) on 24 June 2022. The FTSE 100 company has provided its shareholders with a return of 7.79% over the past one year as of 24 June, while its YTD return stands at 1.19%. AAL currently holds a market cap of £40,943.26 million and is offering an annual dividend yield of 7%.

Centrica plc (LON: CNA)

The shares of the UK’s leading electricity and gas supplier, Centrica plc, were trading at GBX 81.38, down by  -1.79%, at 4:30 PM (GMT+1) on 24 June. The FTSE 100 company has provided its shareholders with a return of 59.60% over the past one year as of 24 June, while its YTD return stands at 13.71%. CNA currently holds a market cap of £4,894.99 million.

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Shell plc (LON: SHEL)

The shares of the British oil and gas firm, Shell plc, were trading at GBX 2,087.00, up by 2.86%, at 4.30 PM (GMT+1) on 24 June. The FTSE 100 company has provided its shareholders with a return of 41.56% over the past one year as of 22 June, while its YTD return stands at 28.87%. SHEL currently holds a market cap of £149,847.08 million and is offering an annual dividend yield of 3.7%.


 

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