At 52-week lows, are these FTSE 100 value stocks now outstanding bargains?

As decent as 2024 has been for the FTSE 100 so far, some of its members are having a much rougher time. Today, I’ll look at two value stocks that are now trading at 52-week lows and asking whether they’re simply too cheap to ignore.

Falling profit

It may have benefitted hugely from the rise in gas and electricity prices over the last few years but I think it’s fair to say that Centrica‘s (LSE: CNA) purple patch is well and truly over. The shares have dropped 13% in 2024 alone as market conditions have, to quote management, “normalised”. Total adjusted operating profit was £1.04bn in the first six months of the year. It was double that in the same period of 2023.

It’s important to put this fall in perspective. While painful for newer holders, those who had the courage to buy at the beginning of the pandemic will still be looking at an exceptionally good return. One can also argue that a lot of negativity is now baked in.

Cheap FTSE 100 stock

The £6.3bn cap trades at a forecast price-to-earnings (P/E) ratio of just six. At face value, this looks dirt cheap relative to both the utilities sector and the wider UK market.

Centrica’s finances also look far healthier than they once did. A huge dollop of net cash on the balance sheet should allow it to continue pivoting its business towards renewable energy sources. And with fuel prices set to rise next month, perhaps the next set of numbers may be more warmly received.

However, this remains an incredibly competitive space where customer loyalty no longer exists. On a purely anecdotal note, I’ve just moved to another supplier from Centrica’s British Gas and saved a packet in the process.

Throw in low margins and a history of inconsistency when it comes to dividends and I’m in no hurry to buy here.

Out of favour

Another FTSE 100 stock that’s recently set a fresh 52-week low is mining behemoth Rio Tinto (LSE: RIO). Its shares have been tumbling in value in 2024 (down 22% as I type).

There are probably a few interconnected reasons for this. Chief among them is surely the slowdown of economic development in China — one of the world’s biggest importers of metals. Geopolitical tensions and high interest rates haven’t helped matters.

Better buy?

Like its top-tier peer, this company’s stock now trades on a low P/E of just eight. Unlike Centrica, however, that’s actually very average within its own sector. There’s also a chance the shares will continue falling in the event of less-than-impressive production updates, in addition to those concerns already mentioned.

All that said, I’m not buying but I’d be more inclined to buy Rio Tinto if I had cash to spare for two main reasons.

First, its size and interests in metals such as copper and lithium means is likely to play a key role in the green energy revolution. This transition will clearly take decades. But that brings me to my second reason.

It boasts a forecast dividend yield of 7.2%. While no passive income stream can be guaranteed, this is double what I’d get from a bog-standard FTSE 100 tracker and could lead to a great result if reinvested and allowed to compound.