Pretty much agree with your analysis and think it's a fairly accepted view.
Remaining in the EU for the banks SP is key, although it's just one of many concerns weighing on the share prices of banks at the moment, a vote to stay in the EU, would probably see stocks rally and banking stocks to rally slightly further than others.
Not too sure about the impact of the HM offloading shares and the impact that will have. I would imagine that by the time the HM offloads shares, there around the 85p mark. A strong divi, a stay in vote for the EU, a less volatile market place would all be a blessing for the SP.
Agree with the analysis below and the divi calculations, although I do think various other factors naturally feed into a SP, especially for this sector.
Some very interesting points raised and generally I agree with the estimates on movement. The main share driver though will revolve around Brexit in the short term. I very much doubt an out vote would come forward but if it did, the destabillaston of the markets, and likely a German exit from the EU following shortly after, would significantly impact on market volatility - which I think to some degree the market has already priced in. It's a big if, but if it did happen I could see the dividend policy being cancelled to shore up core tier capital even further which would have a detrimental impact to the SP. staying in EU however would likely see the SP rise but not significantly until HM has offloaded the public stake - perhaps early next year?
Politically I'm neutral but based on profits, remaining in EU I would consider would be of greater short- medium term benefit for the SP (but the banks UK focus would still maintain the SP in the longer term, albeit with reduced shorter term dividends). Any thoughts?
Nice info and good post. I am a LTH because I believe in the underlying value of the Bank and also because I can see a nice dividend stream going forward. All the prerequisites in my book for a good steady long term investment.
Only thing I see as making a material difference to the SP (not dividend), is the market view on longer term stability which would tend to creep up the PE ratio so effectively acting as a price multiplier on what you say. For example your 4% yield (5.5p) giving 137p might become more like 145 or a bit more as longer term income funds (like pension funds) take a bigger stake.
Other things would be a slow and gradual buy back of shares reducing the 71 zillion down slowly. This would act as an SP multiplier without affecting the dividend per share.. so lower yield but compensated by growth. Rewards the longer term investor.
If we get to 135 ish in 3 years with the div payouts estimated then I will have 100% return and thats a pretty decent thing
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