How do we tell if a FTSE 100 stock looks cheap? One way is to seek out share prices that have fallen this year, and that brings Associated British Foods (LSE: ABF) into view.

The shares are up from their 52-week low in March, but we’re still looking at a 12-month fall of 20%.

Too many pies?

Some of the weakness has to be down to retail fears facing the company’s Primark high street chain. We also have at a collection of five different business here, with Grocery, Ingredients, Sugar, and Agriculture divisions added to Retail.

That brings diversification, which is a good thing. But it can also suggest a company lacks focus, and top management have to keep their eyes on numerous balls.

With first-half results in April, CEO George Weston said he was “frustrated with the results in our Sugar business.” But the other four are doing fine, in line with full-year guidance. The update gave the share price a boost at the time.

The future

Forecasts indicate a fall in earnings per share for the full year, and that has to be holding the stock back. But analysts expect a return to earnings growth that could drop the price-to-earnings (P/E) ratio to under 9.5 by 2027.

Associated British Foods had net debt of £2.8bn at 1 March, up from £2.5bn a year previously. Against a market cap of nearly £15bn, that doesn’t worry me too much. But it’s worth keeping an eye on.

There’s risk from retail exposure, and a possibly perceived lack of focus. But I think long-term investors should consider it.

Valuation

Looking for FTSE 100 stocks on low P/E valuations can also throw up candidates. And that draws my attention to M&G (LSE: MNG). M&G seems to come up in a number of my searches on different factors, like its big 8.3% forecast dividend yield.

There’s a forecast P/E of 10 on the cards for the current year. And a mooted recovery from the past couple of tough years could see it drop close to eight by 2027.

Investment management companies are often on lower P/Es and can be cyclical. But the predicted earnings growth over the next few years should cover the dividends, which are also expected to rise. The cover might be a bit thin though.

Strong outlook

With 2024 results released in March, CEO Andrea Rossi spoke of “two new targets for 2025-2027: to grow adjusted operating profit before tax on average by 5% or more per annum, and to generate £2.7 billion of operating capital.“

The boss added: “I am delighted to announce that today we are moving to a progressive dividend policy, starting with a 2% increase for the 2024 total dividend per share.” That all sounds ambitiously positive.

But the risk hasn’t gone away. The world seem to be lurching from one trade-related economic crunch to another on an almost daily basis. And if M&G’s dividends can’t keep up with inflation, the shares could take another knock. But I see a decent chance of a bull run here and feel it’s worth a closer look.