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FTSE 100 So far, they have enjoyed a solid run in 2025, and investors’ sentiment is supported by easing inflation and low interest rate outlook. But despite the wider gatherings, a valuable pocket is still clearly hidden. Some stocks continue to trade at a modest valuation despite the financial and stock prices showing signs of a recovery.
By focusing on classic metrics such as price and revenue (P/E) ratio, price and sales (P/S) ratio, price and revenue growth (PEG) ratio, investors can identify quality companies that are below perceived value.
Here are two cheap FTSE 100 shares that investors think should consider when heading into the second half of 2025.
BT Group
As the UK’s largest telecommunications company, BT Group (LSE: BT.A) There is no need to referral. It has been providing analog and digital communication services nationwide for almost 180 years. After a long period of unperformance, the stock made a comeback in 2025, rising 34% this year to 190p, bringing the company’s market cap to £18.788 billion.
However, despite the rally, the stock still looks cheap. The P/E ratio is 17.9, and the PEG ratio is just 0.7, suggesting that revenue growth could be undervalued in the market. Meanwhile, a P/S ratio of 0.94 means that investors are paying less than £1 for every pound of revenue.
BT also proves attractive to income investors, with dividend yields of 4.2% and sustainable payment rates of 75.7%. Operationally, the company is on solid ground, with operating profit of 16.3% and stock return ratio (ROE) of 8.3%.
Still, investors should not ignore the risk. Its debt-to-equity (D/E) ratio is up 1.81, and BT is exposed to rising funding costs. There are also challenges from the large capital expenditures required for regulatory price management and full-fiber broadband rollout. These factors may limit the amount that shareholder value can be returned in the short term.
Still, for value investors, I feel it is one of the most promising looking stocks in Footsea right now.
Centrica
Centrica (LSE: CNA) CNA, the parent company of British Gas, operates through energy supply, trading and storage. The stock rose 13% in 2025 and is currently trading at 165p, with a market cap of £7.8 billion. Unlike many of its peers, Centrica has a sharp focus on lean operations and profitability from the energy crisis.
In terms of evaluation, the stock definitely looks cheap. The P/E ratio is just 6.67, P/S ratio is 0.42, and the priceless cash flow ratio is 7.37. These numbers suggest that Centrica’s improved basic market has yet to fully price.
It also boasts a superior operating margin of 28.3% and a superior ROE of 32.1%. The dividend yield is 2.7%, but the payment rate is only 17.8%, leaving significant room for future growth. The debt is also well managed, with a D/E ratio of 0.78.
As always, the risk remains. Centrica will be exposed to a volatile energy market, requiring political scrutiny on pricing and a shift towards renewables, which may require large investments over the next few years.
Overall, I think both stocks are currently undervalued and are likely to be higher this year.
