Ftse Shares With Low Pe Ratios

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Ftse Shares With Low Pe Ratios

Ftse Shares With Low P/E Ratios

Many people automatically assume that low valuations mean they are getting a bargain. While this is true in some cases but you can't always rely on this metric alone to filter sticks.

With that in mind, we have found 2 stocks from the FTSE which has a P/E ratio below 7. We will explore the underlying business of each stock and then give a verdict on whether they are worth buying or not.

Mcbride (Lse: Mcb)

The first stock is McBride, one of the leading suppliers of private label cleaning products. They also manufacture the cleaning products on a contract basis.

Their products include everything from disinfectants to detergents. So, this makes their business very valuable for anyone firm looking to launch their own brand in this space.

However, the share price of McBride shows that the company is struggling. A key reason for this is that the demand for McBride's products has gone down. To put it short, not many companies are interested in starting their own cleaning products via the private label route.

So, unless the McBride can find new areas for growth, it is not worth it to buy the stock at all.

Keller Group (Lse: Klr)

Keller Group is another stock from the FTSE 250 which has a P/E ratio under 7. They are geotechnical specialists and are involved in grouting, piling, and similar engineering projects.

The Keller Group's performance wasn't that great this year at all. But despite this, their shares are up by 124% in the last 5 years.

When compared with McBride, the shares of Keller Group look very attractive. Also, the forward P/E of Keller Group is around 6.8, which makes it a very affordable stock.

The profit margins of the Keller Group are also very modest, with a 25.6% RoE. This also highlights the efficiency of the Keller Group management.

However, it is worth noting that Deutsche Bank has recently issued a HOLD rating for the Keller Group. Also, the bank has lowered the price target of Keller Group by around 8%.

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