Here are 2 cheap FTSE 100 stocks to consider buying in July

The FTSE 100 has loved a stable run in 2025 to date, with investor sentiment buoyed by easing inflation and the prospect of decrease rates of interest. However regardless of the broader rally, there are nonetheless pockets of worth hiding in plain sight. Some shares proceed to commerce on modest valuations, at the same time as their financials and share costs present indicators of restoration.

By specializing in traditional valuation metrics just like the price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-earnings development (PEG) ratio, traders can determine high quality firms buying and selling beneath their perceived value. 

Listed below are two low cost FTSE 100 shares that I imagine traders ought to take into account as we head into the second half of 2025.

BT Group

Because the UK’s largest telecommunications agency, BT Group (LSE: BT.A) wants no introduction. It’s supplied analogue and digital communication providers throughout the nation for nearly 180 years. After an extended interval of underperformance, the shares have staged a comeback in 2025, rising 34% this 12 months to round 190p, bringing the corporate’s market-cap to £18.78bn.

But regardless of the rally, the shares nonetheless look cheap. The P/E ratio stands at 17.9, whereas the PEG ratio’s simply 0.7, suggesting that earnings development could also be underappreciated by the market. In the meantime, a P/S ratio of 0.94 implies that traders are paying lower than £1 for each £1 of income — an encouraging signal for worth seekers.

BT’s additionally proving engaging for revenue traders, with a dividend yield of 4.2% and a sustainable payout ratio of 75.7%. Operationally, the corporate’s on stable floor, posting an working margin of 16.3% and a return on fairness (ROE) of 8.3%.

Nonetheless, traders shouldn’t ignore the dangers. Its debt-to-equity (D/E) ratio’s a excessive 1.81, which leaves BT uncovered to rising financing prices. There are additionally challenges from regulatory value controls and the large capital expenditure required for full-fibre broadband rollouts. These elements could restrict how a lot shareholder worth it may well return within the close to time period.

Nonetheless, for worth traders, I really feel it’s probably the most promising-looking shares on the Footsie proper now.

Centrica

Centrica (LSE: CNA), the guardian firm of British Fuel, operates in power provide, buying and selling and storage. Shares have risen 13% in 2025, at the moment buying and selling at 165p, with a market-cap of £7.8bn. Not like many friends, Centrica has emerged from the power disaster with leaner operations and a sharper deal with profitability.

Valuation-wise, the inventory seems undeniably low cost. The P/E ratio’s simply 6.67, the P/S ratio’s 0.42, and the price-to-free money move ratio stands at 7.37. These figures recommend the market has but to completely value in Centrica’s improved fundamentals.

It additionally boasts a superb working margin of 28.3% and an excellent ROE of 32.1%. The dividend yield’s modest at 2.7% however the payout ratio’s simply 17.8%, leaving vital room for future will increase. Debt’s additionally properly beneath management, with a D/E ratio of 0.78.

As at all times, dangers stay. Centrica’s uncovered to unstable power markets, political scrutiny over pricing and the transition to renewable power, which can require large-scale funding within the years forward.

General, I believe each shares are at the moment undervalued, with a great probability of ending this 12 months greater.