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HIGHLIGHTS
- Value investing is about buying a high-quality company at a great discount price, which over a long period of time would generate a quality return on investment.
- As a stock market investor, individuals should have a mix of value and growth stocks in their portfolio to create an optimum balance.
Value investing is about buying a high-quality company at a great discount price, which over the longer time horizon would generate a high return on investment. The value investing concept has been popularised by one of the greatest investors of all-time, Warren Buffett, who believes in buying quality companies at a good bargain price.
As stock market investors, individuals should have a mix of value and growth-orientated stocks in their portfolios to create an optimum balance over a longer time. Moreover, investors should do proper research before selecting stock for investment.
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Let us see these FTSE-listed value stocks and their long-term investment prospects:
1. Rio Tinto Plc (LON: RIO)
The FTSE100-listed mining and exploration company has operation in several countries. It explores different industrial base metals. To further diversify its product offering, the company has been actively investing in lithium mining project to gain market share and cater to rising demand for the lithium metal from the electric vehicle industry.
In 2021, the company committed to invest US$2.4 billion in Jadar lithium-borates project in Serbia. Also, it acquired Rincon lithium project in Argentine from private equity firm Sentient Equity Partners for US$825 million. The business shift towards lithium mining project might unlock value for its shareholders. Rio Tinto Plc’s current market cap stands at £68,185 million, while its current dividend yield is at 7.1% as of 14 January 2022.
Its shares were trading at GBX 5,406.00, down by 1.04%, around 2 PM BST on 14 January.
2. Tesco Plc (LON: TSCO)
The supermarket chain operator has the highest market share in the United Kingdom. It has a long history of reporting positive earnings. In the recently concluded festive season, the company’s business reported significant growth in consumer demand, resulting in market share gain. The total retail sales were up by 2.4% for the 19 weeks to 8 January 2022. As a result of good performance, the company now expects its retail operating profits to be in the top end of the previous announced guidance range of £2.5 billion to £2.6 billion. Tesco Plc’s current market cap stands at £22,187 million, while its current dividend yield is at 3.5% as of 14 January 2022.
Its shares were trading at GBX 285.05, down by 1.62%, around 2 PM BST on 14 January.
3. Unilever Plc (LON: ULVR)
The company operates in the consumer goods segment and has operations in several countries. For the nine months ended 30 September 2021, the company reported underlying sales growth of 4.4% with a total turnover of €39.3 billion. The sales through ecommerce channel have been growing steadily over the years and now make up to 12% of the total sales. The company has diversified business operation and has various well-known brands to support its future revenue growth.
Unilever Plc’s current market cap stands at £99,954 million, while its current dividend yield is at 3.8% as of 14 January 2022.
Its shares were trading at GBX 3,889.00, down by 0.36%, around 2 PM BST on 14 January.
4. Lloyds Banking Group Plc (LON: LLOY)
The banking and financial service provider has operations in the UK and other countries. It provides retail and commercial banking services to over 25 million customers. The economic recovery after the Covid-19 pandemic has been beneficial for the banking business. In the first nine months of 2021, the lender reported net income of £11,641 million, while its statutory profit before tax stands at £5,934 million. The recent economic scenario of interest rate hike in different countries could act as another positive trigger for the company, leading to improvement in its net interest margin.
Lloyds Banking Group Plc’s current market cap stands at £38,330 million, while its current dividend yield is at 6.5% as of 14 January 2022. Its shares were trading at GBX 54.48, up by 0.95%, around 2 PM BST on 14 January.
5. Ferrexpo Plc (LON: FXPO)
The FTSE250-listed company is engaged in mining and production of iron ore pellets. It carries out its mining operations through two key mines located in Ukraine. The company reported a total full year production of 11.2 million in 2021. The steady recovery in the iron ore prices in the international market throughout the year has been beneficial for the business, resulting in significant growth in revenue and profitability. As a result of good performance, the company declared an interim dividend of 6.6c per shares for its shareholders.
Ferrexpo Plc’s current market cap stands at £1,828 million, while its current dividend yield is at 9.4% as of 14 January 2022. Its shares were trading at GBX 283.40, down by 8.76%, around 2 PM BST on 14 January.
