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I think there are plenty of attractive value stocks on offer on the FTSE currently.
Two options that investors should consider purchasing are Central (LSE: CNA), and Safe store (LSE: INSURANCE).
This is why!
Central
The owner of British Gas is a giant company that supplies energy to more than 10 million homes and businesses.
It looks like Centrica shares are starting to gain momentum once again after a sharp drop in September last year. Over a 12 month period they have risen 14% from 120p last year to current levels of 137p.
From a bearish perspective, I am concerned about two issues. First, falling wholesale gas prices could hurt performance and potentially profitability in the future. I'll keep an eye on this.
Furthermore, the transition to renewable energy is an expensive undertaking. This change could hurt shareholder returns by damaging what currently looks like a healthy balance sheet. However, the company has already set aside money for this upcoming change and appears to be preparing. Preparation is always a good sign for me.
From a bullish standpoint, the stock looks very cheap to me right now with a P/E ratio of just 2. The average P/E ratio across the FTSE 250 The index is closer to 12.
Next, the company offers a dividend yield close to 3%. Additionally, an ongoing £1bn share buyback scheme improves the investment case. However, I understand that dividends are never guaranteed.
Centrica has the financial strength, brand power and reach to be a potentially good buy, in my opinion. Personally, I'd be willing to buy some shares next time I can.
Safe store
As the UK's largest self-storage provider, Safestore's dominant market position and excellent track record are some of its main attractions for me personally.
The shares have fallen 14% in a 12-month period from 979p this time last year to current levels of 889p.
I believe a large part of this decline is due to current economic pressures. As interest rates are higher and inflation has been high, rent collections and property values have fallen. This is the biggest current risk for the company, especially since it is also pouring money into an aggressive European expansion plan.
Another risk that I am wary of is a balance sheet with a lot of debt. This debt could be more difficult to service during the current high interest environment and harm future growth and profitability.
Speaking of expansion, Safestore is now the second largest company of its kind on the continent. This is an exciting development. It's where I think Safestore could reach new heights in the future. The reason is that the European storage market is much less developed and offers good growth opportunities.
Next, the stock strikes me as excellent value for money with a price-to-earnings ratio of just nine. Additionally, a 3.4% dividend yield is attractive to help generate a passive income stream.
Like Centrica, Safestore is another stock that I would personally love to buy the next time I can.
