I love buying FTSE 100 dividend shares, their proven business models and strong balance sheets delivering a steady stream of income. I especially enjoy snapping them up when they’re trading on what I see as cheap valuations.
Despite the Iran War, 2026 has (so far) been another solid year for the stock market. The FTSE 100 index is up 3% since 1 January. Yet a lot of quality blue-chips still offer terrific all-around value.
We’re talking about companies with high dividend yields while also trading at heavily discounted valuations, whether measured by:
- Price-to-earnings (P/E) ratio.
- Price-to-earnings growth (PEG) ratio.
- Price-to-book (P/B) ratio.
Here are two that I’ve spotted: Admiral Group (LSE:ADM) and Barratt Redrow (LSE:BTRW). Want to know why I believe they’re hot bargains to consider?
Value to salute
Admiral offers the dual-benefit of a low historical P/E ratio and a FTSE-beating dividend yield. Its earnings multiple for 2026 is just 12.8 times. That may not exactly be rock-bottom but it’s significantly below the 10-year average, which is 16–17.
Meanwhile, the payout yield is a chunky 5.5%.
Admiral does face mounting risk as inflation rises, pushing up claim costs . But I think the insurer is better placed than many other UK shares to weather this storm.
Why? Its focus on the ultra-stable general insurance market, where revenues remain reliable across the economic cycle. This is especially so in the motor segment, where Admiral leverages its enormous brand power to generate most its earnings.
Crucially, Admiral has other qualities it can use to grow profits despite cost pressures. According to Hargreaves Lansdown notes, these include “its data-led underwriting approach and strong reinsurance relationships.”
Another top FTSE bargain?
The risks to Barratt Redrow have risen sharply since late February. Hopes of interest rate cuts to boost the housing market have disappeared. Now the focus is on potential rate hikes, and the danger this poses to FTSE 100 housebuilders.
Yet I can’t help but think Barratt’s valuation remains too low. I’m drawn in by its 5.5% dividend yield for this financial year. Arguably, it’s even more impressive on other value metrics, including:
- A forward P/E ratio of 10.4, below the 10-year average of 15–16.
- A PEG ratio of 0.1
- A P/B ratio of 0.5.
For the final two ratios, a reading below 1 suggests a share is undervalued. So do the potential rewards of buying Barratt shares at the current price outweigh the risks?
I think so. Over the long term, I believe the stock could snap back as the soaring UK population drives demand for new homes and with it property prices. Estate agent Savills expects average home values to rise more than 22% over the next five years as the market picks up momentum.
Barratt’s enormous land bank puts it in a strong position for when conditions rebound too. It expects to have a hefty 7,000–9,000 plots at the end of this fiscal year.
