6% dividend yield in the future makes the risks of holding them worthwhile10 Apr 2021 10:16
The UK has a clear roadmap out of lockdown, and the coronavirus vaccination programme is on track. The outlook for the UK economy looks better now than it has done for a long time. Bank stocks like Lloyds tend to do well when the economy is roaring. If the UK is poised on the cusp of an economic boom, then Lloyds should be able to start to increase its dividend. The analyst consensus is for 1.7p in 2021 and 2.3p in 2022. Of course, analysts’ forecasts can change.
Lloyds share price
If Lloyds starts paying out dividends again, then shouldn’t the share price start to rise as well? Yes, it probably would. But I think there is a cap on how high it can go. For one thing, as a share price increases, the dividend yield starts to fall, making it less attractive. Looking at a chart of the Lloyds bank share price from 2008 (the great financial crash) onwards and it appears to move between 21p and 88p.
https://www.fool.co.uk/investing/2021/04/09/for-lloyds/