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The best British value stocks to consider buying in June

Each month, we ask our freelance writers to share their top ideas for value stocks with investors — here’s what they had to say for June!

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Centrica

What it does: Centrica, owner of British Gas, supplies energy to more than 10 million residential and business customers in the UK and Ireland.

By Charlie Carman. Centrica (LSE:CNA) is my top British value stock to consider buying in June.

With a price-to-earnings (P/E) ratio, the company’s multiples look extremely attractive compared to most. FTSE 100 Stock

Also, Centrica’s balance sheet looks healthy. With a net cash position of £2.7bn today, the company has plenty of liquidity and a large financial buffer.

Of course, weaker wholesale gas prices in 2024 have weighed on the firm’s performance even though there are signs that prices may rise again due to supply concerns.

In the longer term, businesses face risks from a structural decline in UK gas consumption. However, Centrica is already planning for the future, earmarking £600m-£800m to spend annually on renewable generation until 2028.

Overall, resilient earnings, a 2.9% dividend yield, and an ongoing £1bn share buyback program all bolster the investment case. Adding a rock-bottom valuation to the mix, Centrica shares look attractive to me.

Charlie Carman does not own shares in Centrica.

Dr. Martins

What it does: Dr. Martens makes shoes. 47% of the company’s sales come from wholesale, 28% from e-commerce, and the rest is retail.

By Stephen Wright. I share. Dr. Martins (LSE:DOCS) has been up and down over the past few months. Mostly down, though.

The business has struggled since going public for two reasons. One is the harsh environment and the other is its own operational issues.

The company can’t do much about the former. But I am optimistic that conditions in the US – where Dr. Martins earns 43 percent of his income – will improve.

The second problem is what the firm is trying to fix. While it does so, investors will have to be patient, but I think things can get better.

Speculations about the acquisition of the company led to volatility in the share price. But I will ignore that and focus on core business.

I sold my Dr Martin shares when the price hit 95p. After going back to 75p, though, I think they look great and I’m looking to buy them back.

Stephen Wright does not have a part in Doctor Martins.

Shell

What it does: Shell is a global upstream producer and downstream marketer of oil, gas and energy products.

By James Beard. For the four quarters ending March 31, 2024, Shell (LSE:SHEL) reported adjusted earnings of $3.99 (£3.15) per share. That means it has a price-to-earnings ratio of 9 – for example, less than that Exxon Mobil Corporation (13.5) and the FTSE 100 average (10.5).

It’s a similar story when it comes to assets. Shell’s price-to-book ratio is 1.2 — Exxon’s is 2.3.

Shell’s CEO has blamed some of the gap on an ‘unfashionable’ UK stock market and threatened to move the company’s listing overseas.

Of course, energy prices can be volatile, making it difficult to predict revenue. And with a current yield of 3.8%, many other stocks pay more generous dividends.

But I believe that rational international investors will soon realize that many UK shares – and Shell in particular – currently offer excellent value. So it’s on my shopping list next time I have some extra cash.

James Beard does not own shares in Shell.

TBC Bank Group

What it does: TBC Bank Group provides banking services in the emerging markets of Georgia and Uzbekistan.

By Royston Wilde. I share. TBC Bank Group (LSE:TBCG) has fallen sharply due to political turmoil in the firm’s key Georgian market.

Protests have erupted in the country over the government’s plan to introduce the so-called Foreign Agents Bill. The upheaval—and the resulting tension between Georgia and US and EU lawmakers—has raised concerns about the country’s direction.

However, could this uncertainty factor into TBC’s share price after the recent weakness? I think the answer can be yes.

Today the bank trades at a forward price-to-earnings (P/E) ratio of 4.4 times. It also carries a huge 8% dividend yield at current prices.

The latest quarterly financials are a reminder of TBC’s massive growth potential. Pre-tax profit rose 15.8 percent between January and March as its loan book continued to grow.

On balance, I think the bank is an attractive buy for long-term investors.

Royston Wild does not own shares in TBC Bank Group.


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