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The stock market crash could provide long-term investors with opportunities to buy cheap UK shares. Many FTSE 100 and FTSE 250 stocks have failed to recover from their declines earlier this year. As such, they may produce impressive returns in the coming years.
With that in mind, here are two FTSE 100 shares that could be worth buying today in a tax-efficient account, such as an ISA. They could make a positive impact on your retirement plans in the coming years.
Segro (LSE: SGRO) continues to offer good value for money relative to other cheap UK shares. The real estate investment trust (REIT) currently trades on a price-to-book (P/B) ratio of around 1.3 despite its recent share price rise.
Its recent updates have shown it continues to enjoy high demand for its warehouses. They’re likely to become increasingly popular as consumers shift their spending towards online channels. This could lead to high occupancy rates for warehouse businesses that lowers their risks, as well as increasing rents over the long run that boosts their profitability.
Although Segro currently yields just 2.2%, its dividend growth prospects appear to be impressive. For example, it increased its interim dividend by 9.5% and is expected to maintain an above-inflation rate of growth over the medium term. This could lead to rising demand for its shares in a period of low interest rates that pushes their price higher over the long run. As such, now could be the right time to buy a slice of the business alongside other cheap UK shares.
A long-term FTSE 100 turnaround opportunity
The recent Barclays (LSE: BARC) share price fall means it could offer a wide margin of safety relative to other cheap UK shares. Its market value has declined by 44% since the start of the year. A weak economic outlook and low interest rates are likely to weigh on its near-term prospects.
However, with the bank now trading on a forward price-to-earnings (P/E) ratio of just 8.6, it seems to offer good value for money, relative to other FTSE 100 stocks. Its recent updates have shown that it has been able to make improvements in its efficiency. For example, its cost/income ratio declined from 64% to 57% in its interim results, due to cost reductions. Its balance sheet strength has also improved over recent years, which could help it to overcome an uncertain economic outlook.
Of course, Barclays’ stock price could move lower, relative to other cheap UK shares in the short run. However, investors who’ve a long time horizon may have sufficient time available for it to produce a recovery as the economic outlook improves. Therefore, buying it today as part of a diverse range of shares could be a shrewd move that improves your retirement prospects.
Peter Stephens owns shares of Barclays. The Motley Fool UK has recommended Barclays. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.