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I'm compiling a best value list. FTSE 100 and FTSE 250 Dividend stocks to buy for my stocks and Shares ISA. I am looking for companies that trade with very low price-earnings (P/E) ratios and offer great dividend yields a.
At the top of my list are the banking giants. HSBC Holdings (LSE:HSBA) and station ITV (LSE: ITV). As the table below shows, each offers excellent value for money based on current broker forecasts.
| Company | Forward P/E Ratio | Forward Dividend Yield |
|---|---|---|
| HSBC Holdings | 6.3 times | 10.1% |
| ITV | 7.1 times | 8% |
Here's why I want to buy them the next time I have cash to invest.
HSBC
Asian banking behemoth HSBC faces further strain in 2024 as China's economy struggles to gain ground. Like many financial services providers in the region, it is particularly vulnerable given the problems in the country's real estate sector.
However, I think the P/E ratio of around six times that reflects this danger to the group's earnings. In fact, I am tempted to buy HSBC shares as the long-term prospects for the banking industry in its emerging markets remain very attractive.
Analysts at Precedence Research note that Asia had the largest share of the global retail banking market in 2022, at 34%. And they predict that the market “continue growing at an important rate” in the following decade, thanks to the constant growth of the population and the increase in disposable income in the middle classes.
Its expanding presence and exceptional brand power give HSBC an exceptional opportunity to generate revenue in this landscape. And it is investing massive sums in its retail, corporate and investment banking units to give a further boost to sales growth.
The FTSE 100 company has committed to investing $6 billion in China, Hong Kong and Singapore to achieve “double-digit growth in profits”of its Asian operations. And it is likely to continue spending money in the region, helped by new asset sales in its other territories.
ITV
Today, there is no shortage of streaming platforms competing for our business. In fact, the number of services has skyrocketed since the pandemic and streaming companies are spending fortunes to stand out. NetflixThe mammoth $5 billion content deal with wrestling powerhouse WWE in January underlines just how lucrative show production can be.
I think ITV could be a great way to capitalize on this growing demand for content. Through its production division ITV Studios, it manufactures and sells some of the world's most popular scripted and unscripted programs, such as The voice, love island, Vigil and Snow Punch.
The FTSE 250 broadcaster has invested huge sums of money to turn the division into a global production powerhouse. It currently has 60 different independent production companies in its establishment spanning 13 countries and, surprisingly, sales here are growing ahead of the broader market (up 9% in the nine months to September 2023).
I also like ITV for its impressive growth. ITVX streaming platform. Thanks in large part to its beloved content, streaming hours on the service increased 27% year-over-year between January and September.
Like HSBC, I think this former FTSE 100 stock is trading too cheap at current prices. I think it could be a brilliant buy for both growth and income investors.
