There are nonetheless loads of low-cost shares on the FTSE 100 regardless of the latest rally, and I’m shopping for as many as I can afford.

I like going cut price attempting to find cut-price UK shares. This manner, I keep away from the danger of paying for frothy, overpriced shares. Usually, I’ll get a better yield too.

It’s not a assured successful technique although. Low-cost shares are sometimes low-cost for a purpose. Turning round a struggling firm takes time. Worth traders like me want baggage of endurance.

FTSE 100 bargains

These days, I’ve been busy loading up my self-invested private pension (SIPP). Now I’m turning my consideration to this 12 months’s Shares and Shares ISA.

Trying on the FTSE 100 right now, one inventory leaps out at me. Oil and fuel large BP (LSE: BP) trades at simply 6.6 instances earnings. That’s effectively under the 15 instances usually seen as truthful worth. The share worth has been falling in latest weeks, a interval when Brent crude dipped under $80 a barrel. Over 12 months, the BP share worth is down marginally, falling 0.25%.

I believe it is a shopping for alternative however there’s one underlying threat. The world is meant to be weaning itself off fossil fuels. BP is constructing its renewables capability, however not half as quick as campaigners would really like. It is aware of the carbon transition might be pricey and dangerous.

Final week, the Worldwide Vitality Company predicted that oil demand will peak by 2029, resulting in a significant provide glut. If right, that might be a blow for giant oil. It might be good for the planet however I’m not completely satisfied it’ll occur. The world appears to be utilizing extra vitality than ever, and wishes each supply it might probably get together with fossils. Oil might be with us for a very long time but. So will BP, in my opinion.

Prime worth shares 

Like many commodity shares, the BP share worth could be cyclical. That’s why I’d somewhat purchase when the oil worth is down and the inventory is out of favour, as seems to be the case right now. The dividend outlook is constructive with a forecast yield of 5.23% in 2024 and 5.56% in 2025. The board has been beneficiant with the share buybacks too.

BT isn’t the one low-cost blue-chip providing a mighty yield right now. China-focused financial institution HSBC Holdings trades at simply seven instances earnings and yields 6.91%. Tobacco maker Imperial Manufacturers Group trades at 7.5 instances earnings and yields 7.1%. Mining large Rio Tinto trades at 9.1 instances earnings and yields 6.57%. I might go on.

Let’s say I scraped collectively each spare penny and was in a position to make investments my full £20,000 ISA allowance, not this 12 months however in future years as effectively.

The long-term common whole return on the FTSE 100 is 6.9%. It’s not assured, but when I matched that, it might take me 21 years to make one million. I’d have £1,029,374.

If my hand-picked portfolio of low-cost shares outperformed the index and grew at 9% a 12 months, I’d get there in simply over 18 years. No time to lose then.