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2 ASX blue-chip shares looking cheap this week

With the S&P/ASX200 (INDEXASX: XJO) index approaching record highs today, it’s definitely not an easy time to find super cheap stocks. Still, there are always stocks that are offering you better deals than others, so let’s explore a couple that fit the bill this week.

Australia and New Zealand Banking Group (ASX: ANZ)

ANZ bank shares are up 0.16% today, despite the big four bank going ex-dividend this morning. Still, at the current price of $25.49 the company is trading at its lowest levels since February. Investors have clearly not forgiven ANZ for reducing its franking level on its dividend for the first time in 20 years.

Although this cut is certainly not good news for ANZ investors, I still think the market may be overreacting. ANZ’s raw dividend remains at the same level – and is offering a yield of 6.27% on current prices – which is a vast improvement on any term deposit you could expect to get from the other side of ANZ’s ledger. I think the large dividend yield and historically cheap price ANZ is going for today makes this a stock worth looking at this week.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue shares are down a sizeable 5.38% today after the price of iron ore took a big slump over the weekend. Iron ore is asking around US$80 per tonne at the time of writing, which is down around 4% from last weeks levels.

It seems that declining demand from China is the culprit for the falling iron price, but I think this could well reverse in the near-future – especially if the US and China can sign the long-awaited trade deal. Although Fortescue shares are still looking expensive from a historical point of view, it pays to remember that this company returned a record amount of cash to its investors this year, and may still have plenty of fuel in the tank for more. Thus, I see Fortescue as a buy at current levels.

Foolish takeaway

I think these 2 ASX shares represent some of the best blue-chip deals going out there on the market this week. I think ANZ is a more obvious bargain right now, but Fortescue has proven to be a very lucrative company to own over the past decade, so today’s prices might also prove to be a steal.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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