I’m looking out the FTSE 100 for one of the best worth shares to purchase. Extra particularly, I’m looking for blue-chip shares that commerce on low price-to-earnings (P/E) ratios and which carry dividend yields north of the three.7% common.

These two FTSE shares each meet this standards. However are they actually sensible bargains or basic investor traps?

Barratt Developments

The FTSE 100 housebuilders have lengthy provided dividend yields far above the index common. The truth is in the present day, Barratt Developments’ (LSE:BDEV) ahead yield of seven.2% is sort of twice the blue-chip common.

This specific inventory additionally presents terrific worth from an earnings perspective, a minimum of on paper. It at the moment trades on a rock-bottom P/E ratio of seven.1 occasions.

I already personal shares within the homebuilder. However a gentle stream of combined information from the housing trade means I don’t plan so as to add to my holdings simply but.

Newest Nationwide information on Friday confirmed common property costs tanked 3.1% yr on yr in March. This was the seventh straight month of decline and the most important drop since 2009.

Barratt stated it has witnessed “some early indicators of enchancment” when it final up to date the market in February. But I’m looking for proof of robust and sustained restoration earlier than spending extra of my hard-earned money right here.

I plan to cling onto my Barratt shares. The long-term outlook for the newbuild market stays brilliant as Britain’s inhabitants grows. But the potential of dividend disappointment in 2023 (and presumably past) means I’m on the lookout for different shares to spice up my passive earnings.

NatWest Group

Theoretically, NatWest Group (LSE:NWG) also needs to profit because the UK inhabitants will increase. Retail banking merchandise like present accounts and mortgages are important within the fashionable world.

What’s extra, this specific Financial Institution has trusted manufacturers together with Royal Financial institution of Scotland and Coutts underneath its umbrella. These might assist it win enterprise within the coming years.

Nonetheless, NatWest’s long-term outlook can also be fraught with hazard. The British financial system seems to be set for a protracted interval of weak point that would hamper its skill to develop revenues. Earnings may even come underneath strain as rates of interest fall once more and competitors within the banking trade heats up.

I’m additionally involved a couple of potential explosion in dangerous money owed on the financial institution. This in flip might influence the extent of dividends it pays out in 2023 and later.

Latest analysis reveals that UK households have racked up greater than £2trn price of debt. Because the cost-of-living disaster endures and the financial system cools, NatWest faces a spike in mortgage impairments.

The financial institution has already put aside an eye-watering £337m to cowl the price of dangerous loans in 2022 alone. And it has seen a big uptick in provisions in current quarters.

Not even a low P/E ratio of 6.2 occasions, or big 6.4% dividend yield for 2023, are sufficient to tempt me to purchase NatWest shares. There are rather more engaging, low cost dividend shares I’d quite put money into in the present day.