Since Russia invaded Ukraine on 24 February, global stock markets have been volatile. In the past five days, the FTSE 100 index dived by 8.2% and then bounced back by 4.2%. On Monday morning, there were plenty of quality, cheap shares to choose from. Here are three UK shares that I don’t own, but I wish I’d bought during Monday’s meltdown.
Cheap shares 1: Lloyds Banking Group
I should have bought shares in Lloyds Banking Group (LSE: LLOY) on Monday morning. I’m kicking myself that I missed the chance to buy these cheap shares at that day’s low of 38.1p. To me, that would have been a fantastic bargain. As I write, the Lloyds share price stands at 45.18p, over 7p higher. That’s a handsome gain of almost a fifth (+18.6%) in two days. But I still regard Lloyds shares as cheap today, as the Black Horse bank is valued at just £32bn. To me, that’s too modest a price tag for the UK’s leading mortgage lender — a group with over 26m customers. At this level, Lloyds shares trade on a multiple of 6.1 times earnings and an earnings yield of 16.5%. Their dividend yield of 4.4% a year is 1.1 times the FTSE 100’s cash yield. Though this stock has been highly volatile lately, I would like it in my family portfolio.
Discounted stocks 2: ITV
On Monday, I couldn’t believe how low the ITV (LSE: ITV) share price plunged. At their low this week, these cheap shares collapsed to 69.28p. I’d have bought the entire broadcaster at this knockdown price. As I write, ITV shares have rebounded to 82.66p, leaping 13.38p since Monday. That’s a juicy gain of 19.3% in two days. This suggests to me that investors panicked by selling ITV stock below 70p. At the current price, ITV is valued at just £3.3bn, perhaps making it a tempting target for a media giant? The shares now trade on a price-to-earnings ratio of 8.9 and an earnings yield of 11.3%. ITV’s dividend yield of 4% a year is in line with the FTSE 100’s cash yield. Although ITV has struggled since the Covid-19 crisis began in early 2020, I remember its shares topping 200p five years ago. Hence, I’d gladly buy this lowly rated stock today.
Knocked-down stocks 3: Vodafone Group
The third of my cheap shares is Vodafone Group (LSE: VOD). Again, this FTSE 100 share slid in Monday’s selling frenzy. At the day’s low, it fell to 115.88p. As I write, it hovers around 119.32p, up 3.44p (+3%) since Monday’s bottom. At this price, the telecoms giant is valued at £32.1bn. Yet Vodafone has over 300m mobile customers and 27m fixed-broadband customers across 21 markets and 48 partner markets. To me, this business has huge potential, perhaps not reflected in the current share price (down 14.5% since 16 February). What most attracts me to Vodafone shares today is their market-beating dividend yield. Currently, this stands at 6.4%, around 1.6 times the FTSE 100’s cash yield. Despite Vodafone carrying €44.3bn (£37.3bn) of net debt on its balance sheet, I see this Footsie share as a solid and reliable source of passive income. That’s why I’d buy VOD today.
Finally, though I’d buy these three dividend shares today, I know that share dividends are not guaranteed. They can be cut or cancelled without notice, as history has taught me well!