RE: RE : Please keep this board about Lloyds sp18 Jan 2021 12:36
Buying Lloyds shares for income
Around this time last year, shares in Lloyds supported a dividend yield of around 5.3%, or 3.2p per share. If the lender reinstated its dividend at this level in 2021, investors would be in line for a yield of 8.8%
In November, Lloyds reported a Common Equity Tier-1 ratio of 15.2%. At the end of 2019, the ratio was 15%. This was significantly above management’s minimum required level of 13.5%.
When the Tier-1 capital ratio hit 15% in 2019, Lloyds declared a final dividend of 2.25p per share, totalling £1.6bn. I think this capital figure only increased during the last three months of the year. That suggests Lloyds could return substantially more than the £1.6bn payout it distributed for 2019.
I think these numbers mean investors could see a final dividend for 2020 of around 2.5p to 3p per share in the best-case scenario. This suggests the stock could provide investors with a dividend yield of 7% to 8.2%, based on my figures.