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The Motley Fool UK No savings at 40? I’d buy these 2 bargain FTSE 100 stocks to retire on a passive income

By February 12, 2020 No Comments

The FTSE 100’s past performance highlights its potential to boost your retirement prospects. For example, the index has delivered a high-single-digit annualised total return since inception.

Despite its strong performance, there are a number of large-cap shares that seem to offer good value for money at the present time. As such, now could be a good time to kick-start your retirement plans through purchasing FTSE 100 stocks.

With that in mind, here are two large-cap shares that appear to offer good value for money. Buying them now at age 40, or over the long-term from any age, could improve your prospects of making a generous passive income in older age.


Buying stocks while they trade on low valuations has historically been a sound means of improving your scope to make capital gains. As such, with Sainsbury’s (LSE: SBRY) having fallen by around 29% in the past year and it now trading on a price-to-earnings (P/E) ratio of 10.7, it could offer long-term investment appeal.

Certainly, its performance in the most recent quarter was disappointing. For example, its like-for-like (LFL) sales declined by 0.7%, while a large amount of promotional activity in the retail sector has failed to provide the business with improving margins.

However, with Sainsbury’s continuing to invest in its online offering and in improving the customer experience through innovative new technology, it seems to be strengthening its market position. This is expected to lead to an improving financial performance over the next two years.

In addition, its planned improvements in efficiency and expanded range of value products could help to improve its competitive position. As such, now could be the right time to buy a slice of the business while it seems to offer a wide margin of safety.


Another FTSE 100 stock that is experiencing an uncertain period is Mondi (LSE: MNDI). The packaging and paper business reported softer demand for its products in its most recent quarter, while prices for key paper grades weakened. This caused a fall in the company’s underlying profit of 18% versus the same quarter of the previous year, and is expected to contribute to a 9% drop in its bottom line in the full year.

Looking ahead, Mondi will continue to deliver major investment in its asset base to further strengthen its long-term growth potential. It is also undergoing a restructuring of its business units, which could create a simpler operating model that benefits from greater efficiency.

With the stock currently trading on a P/E ratio of 13.3, it seems to offer good value for money at the present time. It is forecast to post a rise in net profit of 7% next year, which could help to catalyse investor sentiment and may boost its share price over the coming years.

Income-seeking investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this out-of-favour business that’s throwing off gobs of cash!

But here’s the really exciting part…

Our analyst is predicting there’s potential for this company’s market value to soar by at least 50% over the next few years…

He even anticipates that the dividend could grow nicely too — as this much-loved household brand continues to rapidly expand its online business — and reinvent itself for the digital age.

With shares still changing hands at what he believes is an undemanding valuation, now could be the ideal time for patient, income-seeking investors to start building a long-term holding.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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