LONDON -- Today, the FTSE 100 (INDEX: ^FTSE) as a whole trades on a price-to-earnings ratio of 11.2 -- not expensive, but not exactly screamingly cheap, either.

Run your eyes down a list of the top 20 shares making up the index, and it's certainly possible to spot shares on P/Es much higher than that average. Diageo, for instance, trades on a trailing-12-month P/E of more than 25. British American Tobacco, to choose another example, has a P/E of 21.

However, three of the FTSE's largest shares are on a lower P/E -- indeed, much lower than the FTSE's average.

Size is everything
In outline terms, it's not difficult to guess why. "Elephants don't gallop," growth investor Jim Slater famously wrote. And to be sure, shares don't come much more elephantine than the upper reaches of the FTSE 100 -- especially the top 10.

But look more closely, and you'll these shares are trading on bargain P/Es that are also due to other factors. Simply put, these shares are relatively unloved, with P/Es that are below both their industry averages and their own five-year highs.

But is that lack of love justified? For the most part, I think not, especially when -- in terms of market capitalization -- two of the three shares in question are the two single-largest companies in the index. Indeed, as we'll see in a moment, two of these three, ranked by revenue, are also in the top five of the Fortune Global 500.

So are they unloved? Maybe. But minnows they are definitely not. Are they about to go "pop"? Certainly not. Let's take a look at the three shares in question.

Global giants


% of FTSE 100

Today's Price (pence)

Forecast P/E

Historic P/E

Royal Dutch Shell (LSE: RDSB.L)















Source: Bloomberg.

Royal Dutch Shell ranks first in the Fortune Global 500 for revenue -- in other words, businesses don't come any bigger. It operates in 80 countries around the world, owns more than 30 refineries and chemical plants, has 43,000 retail filling stations, and produces 3.2 million barrels of gas and crude oil each day.

HSBC isn't quite the world's largest bank by revenue -- ING, BNP Paribas, and JPMorgan Chase are bigger -- but even so, it serves about 60 million customers worldwide through 6,900 branches and offices in 84 countries. That said, it wins out on one ranking: HSBC has the distinction of having paid out more in dividends than any bank in the world over the past five years.

BP is another global giant, being ranked the world's fourth-largest company in terms of revenue, according to the Fortune Global 500. Active in 30 countries worldwide, it operates 16 refineries and 21,800 retail sites and owns country- or region-specific brands such as Aral, Arco, and Castrol. Still defined by its problems in Russia and the Gulf of Mexico, BP has the muscle to shoulder aside such difficulties and go on delivering shareholder returns for decades.

Slightly further down both the FTSE 100 and the Fortune Global 500 is another British business that also has a global footprint and is trading on a beaten-down P/E -- so much so that it has caught the eye of Warren Buffett, who only rarely makes forays outside of the U.S. This free special report from The Motley Fool -- "The One UK Share That Warren Buffett Loves" -- highlights the compelling investing thesis that Buffett has acted on. Why not download a copy? It's free and can be in your inbox in seconds.

Want to learn more about shares, but not sure where to start? Download our latest guide -- "What Every New Investor Needs To Know" -- it's free. The Motley Fool is helping Britain invest. Better.

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Malcolm owns shares in BP, but not in any other companies mentioned here. Motley Fool newsletter services have recommended buying shares of Diageo. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.