Motley Fool 23rd March24 Mar 2015 11:32
I'm never convinced by the Motley Folk, but I do fully agree with this:
"Since the turn of the year, shares in Santander have fallen by 8% while the FTSE 100 is up 1%. A key reason for this is the share placing that was announced by the bank, as it seeks to shore up its financial position. A result of the share price fall is an even more appealing valuation with, for example, Santander now trading at a sizeable discount to the FTSE 100. In fact, its price to earnings (P/E) ratio is just 12.5, versus over 16 for the wider index.
In addition, Santander’s yield has improved due to its share price fall, with the globally diversified bank now yielding a relatively appealing 3.3%. However, with healthy growth in the bank’s bottom line forecast, Santander’s dividends per share are all set to rise by 11.8% next year. As such, it could prove to be a top income play over the medium to long term, and appears to be worth adding to your ISA."
I have great faith in this company pulling back over the next few years so perhaps we will eventually see the £6 I foolishly predicted last year. I regard the current price as a strong buying opportunity. Of course the dividend now isn't what we are used to, but remains good, especially in prospect and when compared to the sector.