Top 3 dirt cheap FTSE 100 stocks for easy passive income - you won't believe the potential!

In the realm of investing, the FTSE 100 has displayed commendable performance in 2024. Despite this success, opportunities abound within the index in the form of lowly valued stocks. For those with the capacity and inclination to generate passive income, seizing these opportunities may prove rewarding.

Long-Term Buy

Rio Tinto stands out as an intriguing prospect. This mining giant’s shares are trading at a meagre nine times forecast earnings, a stark contrast to the index average. Consequently, low demand for metals has led to a 17% price drop since January, presenting an appealing buying opportunity. The current dividend yield of 6.4% looks promising, demonstrating plausible future returns.

Furthermore, as the global shift towards green energy intensifies, scarcity of copper and lithium may bode well for Rio Tinto’s prospects, potentially translating into significant returns for investors.

Big Dividend Stock

To diversify one’s investment portfolio, considering a stalwart like Legal & General could prove prudent. With an exceptional yield of 9.5%, coupled with a modest valuation of 12 times earnings, this stock offers an attractive proposition. However, caution is advised, as any unforeseen economic turbulence could impact earnings projections significantly.

Nonetheless, Legal & General’s proven record of consistently increasing dividend payouts post the Great Financial Crisis, combined with a burgeoning aging population emphasizing retirement planning, make it a compelling investment case.

Defensive Demon

For an investor seeking stability amidst market volatility, pharmaceutical powerhouse GSK presents an intriguing option. Despite a comparatively modest yield of 3.8%, the defensive nature of pharmaceuticals and a price-to-earnings ratio of 10 offer enticing prospects.

The resilience of pharmaceutical companies coupled with GSK’s success with recent products like the shingles vaccine underscores the company’s potential for robust growth ahead.

In conclusion, for investors eyeing passive income generation, turning towards undervalued stocks within the FTSE 100 could hold the key to long-term financial success. By carefully selecting a diversified portfolio, one can navigate market uncertainties and unlock substantial returns in the ever-evolving world of investing.