Picture supply: Getty Photographs
It’s been an incredible yr up to now for many main inventory markets. The US S&P 500 index has leapt by 10% in 2024, whereas its tech cousin, the Nasdaq Composite, is up 9.4%. Alas, the UK’s FTSE 100 is forward simply 3.2% this calendar yr. Nonetheless, the Barclays (LSE: BARC) share worth has bucked London’s development by surging larger since 2023.
Barclays beats the market
Then once more, if we return to mid-February, Barclays shares have been trying weak. On 13 February, the share worth closed at 140.48p, 9.6% above its 52-week low of 128.12p hit on 30 October.
Nonetheless, since Valentine’s Day, the Blue Eagle financial institution’s inventory has shot up. As I write — on Thursday, 4 April — this inventory trades at 193.46p, valuing the group at £29.2bn. That’s an increase of 37.7% in 51 days — a reasonably highly effective efficiency for a ‘boring’ FTSE 100 inventory.
Right here’s how the Barclays share worth has carried out over six timescales:
| 5 days | 7.7% |
| One month | 13.7% |
| Six months | 25.7% |
| 2023 up to now | 25.5% |
| One yr | 32.1% |
| 5 years | 18.9% |
Certainly, the financial institution’s inventory has outperformed over all six intervals, starting from one week to 5 years. What’s extra, it’s overwhelmed the broader index over one and 5 years, with the Footsie up 4.4% and seven.1%, respectively.
We purchased Barclays for earnings
For the file, my spouse and I personal these shares as a part of our diversified, balanced household portfolio. We paid 154.5p a share for our holding, shopping for in July 2022.
To this point, the worth of our Barclays stake has elevated by 25.3% on paper. Nonetheless, we purchased this inventory for its means to generate market-beating money dividends. These totalled 6p a share for 2021, 7.25p for 2022, and 8p for 2023, with the newest instalment of 5.3p a share arriving simply yesterday. Good.
In different phrases, Barclays’ money yield has elevated by 25% in two years — an excellent scenario for earnings buyers like me.
We’ve no plans to promote
Regardless of offering us with respectable paper good points and enticing dividends, we’ve no plans to promote our Barclays shares for the forseeable future. That’s as a result of I nonetheless see this inventory as comparatively low cost, each in historic and geographical phrases.
Barclays shares commerce on a a number of of seven.2 occasions earnings, delivering an earnings yield of 13.9%. They provide a dividend yield of 4.2% a yr, barely forward of the FTSE 100’s yearly money yield of 4%. Additionally, this payout is roofed 3.4 occasions by trailing earnings, which I regard as a wholesome margin of security.
That stated, 2024 is lining as much as be a more durable yr for British banks than 2023. Rising client costs, hefty excessive power payments, and rising taxes have hit family budgets laborious. This will nicely result in decrease credit score progress and rising unhealthy money owed for UK lenders.
Even so, we intend to hold tightly onto our shares, no matter what occurs to the Barclays share worth within the brief time period!
