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Barclays PLC (LON:BARC) will increase its dividend on the 3rd of April to £0.053, which is 6.0% higher than last year's payment from the same period of £0.05. Although the dividend is now higher, the yield is only 4.9%, which is below the industry average.
See our latest analysis for Barclays
Barclays' Earnings Will Easily Cover The Distributions
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Having distributed dividends for at least 10 years, Barclays has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Barclays' payout ratio of 29% is a good sign as this means that earnings decently cover dividends.
Over the next 3 years, EPS is forecast to expand by 47.1%. The future payout ratio could be 29% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Dividend Volatility
While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was £0.065 in 2014, and the most recent fiscal year payment was £0.08. This works out to be a compound annual growth rate (CAGR) of approximately 2.1% a year over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Barclays has impressed us by growing EPS at 25% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Barclays Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Morning JayK, all good thanks. Hope you and your clan are doing well. Not sure if you sold your car or not?
That's exactly how I read it also. However, i wouldn't want to cloud anyones judgement. It will be interesting to see if on Thursday, post-div, the share responds with a text-book drop of the same circa div-amount?
Regards, MrA
@makros, I guess your right and so many brands have issues but Mclaren seems to take the brunt of it. I do know a few friends that have had 12C and again many many had gearbox issues, even the 650S has niggles. Whilst I'd love a 600LT its beyond sensible budge so a 570 which I can tweak a bit and Litchfield have some good packages for it (I track my cars) or a 650S which is older but more capable. A lot of my friends use V-Engineering for servicing and maintenance, ex Mclaren guys. Our Macan we've had for 6 years being 1 year old when we purchased it and touch wood the transfer box is ok just hit 40K miles, however Porsche did give goodwill of 10 years to owners even if you don't have a warranty, again I never ran extended warranty and its been ok, same for my 981 Boxster GTS and Cayman GTS, they were pretty solid. But then you get the 911.1 GT3 needing new engines and being given 10 year good will engine warranty! Currently I am in a tweaked BMW M2 Competition Litchfield have fettled with it and I finally get back on track next week after 4 years of house moves, 2 kids etc, will be somewhat different from my Radical SR3 RSX but I am super excited to be back! Maybe I'll end up keeping the M2 and just putting the left over cash into investments but thats just boring right haha. Have a good day buddy!
My reaction is to sell my shares before the year end. My losses will offset any tax due on the sale of quality shares i am selling. Good luck to those of you staying with ie trusting the existing "management"
Morning MR A, hope your well. So basically he is saying keep these guys in as they are my friends? Ha, sorry feeling cynical, either that or he believes these guys can and should be given the chance to turn it around, which is the key bit in all that article for me.
Morning All,
To those that cannot log-in to this site of citywire.com. I have copied and pasted accordingly.
Regards, Mr A
Activist investor Jeremy Hosking has questioned what he sees as a ‘15-year share price undervaluation’ of Barclays, following the bank’s results today.
The lender implemented a £2bn cost-cutting drive on Tuesday, alongside plans to return £12bn to shareholders over the next three years.
However, the Hosking Partners founder, who is a long-term shareholder in the bank, suggested shareholders had been given a raw deal.
‘The 60% discount to tangible book value either demands surgical action or an acknowledgement that Barclays has massively overstated its shareholders’ funds via dodgy accounting,’ Hosking asked. ‘Which is it to be?
‘Shareholders would benefit from a drastic shrinkage of Barclays’ consolidated balance sheet, the consequential creation of excess capital, and the return of that excess to shareholders via sustained buybacks.’
Barclays’ stock has traded sideways for five years and remains well below its pre-global financial crisis peak of 756p, putting chief executive CS Venkatakrishnan under pressure. Shares in the business were up 5.7% to 158p on Tuesday at 12.15pm.
As part of the shake-up of the firm, £12bn is set to be returned to shareholders via dividends and buybacks over the next three years.
Much of the aforementioned £2bn cost-cutting drive will be in the corporate and investment bank, with £0.7bn of cuts earmarked in this area.
Hosking has been particularly scathing of investment banking, although he does not believe that eradicating this unit would be a silver bullet.
‘Shorn of the investment bank, Barclays would probably carry the valuation afforded Lloyds or Natwest, which would hardly be a case for shareholder rejoicing,’ he said.
‘Shareholders should vote against the re-election of Barclays’ directors until a coherent way forward is in place and agreed with investors. This business-as-usual circus has gone on for too long.’
Thanks for bringing the historic perspective. My calculation has assumed no revenue and RoTE growth. The investment bank environment may improve in this 3 year period. US stock index has been running at all time high. There is a high chance a correction/high volatility period in next 3 years, which will further bump up the investment earning just like covid-19 period. Let's see how Venkat turns around the bank.
Https://uk.finance.yahoo.com/news/terry-smith-never-invests-banks-130000308.html
@JamesYoung, that would basically take the share count to 2013 level before the capital raise. Shares were around 300p then.
@jayK, yea you can only give verdict on personal experience really, back in the day my Tuscan(speed 6) was back and fore like a yo yo, I had an early Mclaren12c it was rapid, super handling but very unreliable, newer ones may be better let\s see, you are right about Porsche though I've had 3 macans all had to have new transfer boxes under warranty, a 991.2 with coolant issues, and my daughter's 718S is in Lovetts as we speak requiring a new turbo!! luckily all under warranty...
The Guardian gives its views.
Again, worth a read.
Regards, MrA
https://www.theguardian.com/business/2024/feb/20/nice-targets-but-scepticism-is-hard-to-shake-at-barclays
Uphill battle at Barclays, says Third Bridge
Barclays (BARC) needs to cut staff by 20% in order to reach its £2bn cost-saving target, as the bank fights an ‘uphill battle’, says Third Bridge.
The Citywire Elite Companies AAA-rated bank announced plans to win over shareholders, including a cost-cutting drive that will save £2bn by 2026, a management shake-up, and £10bn of dividends and buybacks over the next three years.
Third Bridge analyst Max Georgiou said to achieve its £2bn target, a ‘20% reduction in headcount is needed’ but this would not impact day-to-day operations.
‘Previous cost reduction programmes have not been executed effectively, in some part due to its political culture,’ he said.
‘A coherent strategy is needed for future success but is an uphill battle.’
Georgiou added that further compression in net interest margin, or the difference between the interest earned on loans and the interest paid to depositors, is expected as interest rates stabilise and pressure from competitors grow for deposits.
Shares in the bank rose 4.6%, or 7p, to 156p on the announcement of the cost cuts on Tuesday, but are still down nearly 10% over the past year.
https://citywire.com/wealth-manager/news/stock-talk-barclays-needs-to-cut-staff-by-20-says-third-bridge/a2436642
Anyone know the dividend dates /amounts? 😂😂😂
I just couldn’t resist MrWolf. Have a Good Weekend.
Evening One and All,
Now as the dust starts to settle, the views of Reuters following Tuesdays Annual Results.
As I have mentioned before Reuters are rarely wrong and I am struggling to disagree with their detailed summary here.
Definitely worth a read in my humble opinion.
Regards, MrA.
https://www.reuters.com/business/finance/barclays-maps-uncertain-route-simpler-stronger-future-2024-02-20/
Https://uk.finance.yahoo.com/news/barclays-must-face-u-shareholder-154520738.html
In past a few days, Morgan Stanley increased their price target for BARC from 235p to 255p. Morgan Stanley has always been on the optimistic side. Bank of America increased the target price from 160p to 170p. BoFA claims Barclay still has a tough problem to solve.
RNS news shows BARC started buy back yesterday. If price stays around 165p, BARC can buy back 606M ordinary shares for this round. For 3 years, they can reduce 3.64B shares and assume they issue 600M for employee incentive plan, net reduction of share counts will be ~ 3B shares. This will reduce the share counts to ~ 12B, TBV will increase to ~420p. They will make 42p to 50p a share after 2026. Dividend will also increase above 6% when they keep the total dividend amount constant.
I’m out. The US is too hot at the moment and record highs there have spooked me. I fear a crash may be coming which will ripple across to the UK. . With these tech stocks going through the roof it feels a lot like the internet bubble all those years ago and we know that ended in tears.
Caution needed.
Makros, a lot of Friends have them and have had them for many years 650S, 570, 675, 765 and they are fairly robust unless you read too much internet. My close mates new Porsche 911 992 is full of shocking faults and its new. I won't warranty, I never do, check out V-engineering who will look after them.
@trouts, yep since 27 oct 23 recent lows ,Dow up around 20% Dax 17%, and of course ftse 100 laggard 5%, says it all really....
@jakK, nice thought the 250's me too, but don't buy a mclaren unless you've got factory warranty plus want to spend a lot of time drinking coffee in the dealerships while its being repaired , nice but unreliable- a modern day TVR!!
There's a party going on all over, even Europe hitting all time highs... It's just the UK isn't invited. Our market is still stuck around the pre-covid level *sigh*.
Its going to the moon!! Lol - 250 by summer, I can't see it unless we see a major turn in the UK economy to be honest. The markets in general aren't too bad but nothing is really convincing me of a bull market yet which is what I think it would need. I am long and still holding, if its £2.50 by summer I am buying my Mclaren a year earlier, so I hope it does! Have a good Friday everyone.
Don't beat yourselves up over a few potential pips, it was a wise move considering past performance.
Yesterday's volume buy from Golds (buying back) hardly touched the sides, the thing is there was a lot of momentum (which I like to disguise myself amongst) though fairplay to them, least they timed it right on the button of yesterday's low.
Back in the old days it was a matter of pushing the calculator to get any kind of idea of a drop off.
These days the software / bots eat trades up on average of 4/500 a second, Joe Average hasn't got a Scooby Doo.
Take the typical retail trader, you can spend 4hrs / 4 days researching a trade, only to find out the big boys went against the same position a week earlier.
Take both previous year end final reports, it was the usual scenario "let's have a drink later mate" young fund managers and sniff have always gone hand in hand.
Hence the phrase "Sell the news" by the time the news is dropped, half a dozen floor rats have spilled their guts weeks earlier, in some wine bar after work.
Sad fact, though always the case !
Personally I would not like to hold through a dividend on the likes of Barclays, unless I had plenty of wiggle room when it adjusts, take past finals out of the question and evaluate this year.
1. Treasury Bonds doing better atm
2. IB should start picking a moderate return by end of March / April
3. The buybacks only previously cushioned 50% of the actual drop offs (momentum / volume ) hence difficult to suss exact target areas.
4. This quarter Q1 looks very muddy atm, the real money that chips us up, will only be trickled charged until we see a strong return on the next results, Feb / March are always a drain on our SP as there is nothing to offer, that makes much of a difference. The smoke and mirror buyback bonanza wont prop us up with support !
Unless the background market starts printing good news, "Green shoots" is what we need to start hearing.
5. One thing is for certain and I trust it 110% . . the charts clearly show one more 'clear out' before interest rates are able to balance back and allow some predicted clarity.
So the big question is, we have just slashed through a serious milestone (our old friend 200 ma) will this act as support, with retail interest and a few fund managers adding to their holdings or will we just fall back to test ground until clarity over the next quarter ?
Everyone else free to add their opinions, thats whats this is all about at the end of the day.
Not giving advice in any way, you only need to look at Monthly, Weekly, Daily trends and R&S keys ares, it's not rocket science.
Add in the fact we have been in consolation range the past 24 months, it certainly looks far, far better for us all.
174's looking sticky.
Lastly with the utmost respect and empathy to anyone sat on +£3 averages, there is still ground to cover sadly.
GLA
Since the recent results this thing seems to have shot its load!!, anyone with decent technical know how got some direction/targets they can share- thanks
Morning Mr A' & all
Despite your very informative post, one forgot to add - those who have invested via Dumb investor, may wish to wait until someone in the back office can be even ar$3d, to transfer the div funds into its own customer accounts !
Maybe they might trickle a few accounts over by Friday 5th April or even Monday the 8th , who knows ?
Interested to see who posts the usual questions "Anyone know the dividend dates /amounts?" without taking the trouble to even read below or click on the (very easy to direct) information links above lol.
If we reset the clock, who's going to claim the title for this years annually, most anticipated question?