Stock market

Barclays shares are up 38% since February 13!

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It’s been a great year so far for most major stock markets. United States S&P 500 The index has a 10 percent jump in 2024, while its tech cousin, Nasdaq Composite, is 9.4 percent higher. Alas, Britain’s FTSE 100 This calendar year is just 3.2 percent ahead. However, K Barclays (LSE: BARC) share price has bucked the trend in London with the highest gain since 2023.

Barclays beat the market.

Then, if we go back to mid-February, Barclays shares were looking weak. On 13 February, the share price closed at 140.48p, up 9.6% from a 52-week low of 128.12p on 30 October.

However, since Valentine’s Day, Blue Eagle Bank stock has rallied. As I write — on Thursday, April 4 — the stock trades at 193.46p, valuing the group at £29.2bn. That’s a 37.7% gain over 51 days – a very powerful performance for a ‘boring’ FTSE 100 stock.

Here’s how Barclays’ share price has performed over six periods:

Five days 7.7%
one month 13.7%
Six months 25.7%
From 2023 till now 25.5%
a year 32.1%
Five years 18.9%

In fact, the bank’s stock has outperformed in all six periods, from one week to five years. What’s more, it has beaten the broader index in one and five years, with the FTSE gaining 4.4% and 7.1% respectively.

We bought Barclays for income.

For the record, my wife and I hold these shares as part of our diversified, balanced family portfolio. We paid 154.5pa a share for our holding in July 2022.

Year to date, our Barclays share price is up 25.3% on paper. However, we bought this stock for its potential to generate market-beating cash dividends. That totals 6p per share for 2021, 7.25p for 2022, and 8p for 2023, the latest tranche of 5.3pa a share arrived yesterday. good

In other words, Barclays’ cash flow has grown by 25% in two years – an ideal situation for income investors like me.

We have no plans to sell.

Despite providing us with paper profits and attractive returns, we have no plans to sell our Barclays shares in the near future. That’s because I still see the stock as relatively cheap both historically and geographically.

Barclays shares trade at a multiple of 7.2 times earnings, yielding an earnings yield of 13.9%. They offer a dividend yield of 4.2% per annum, slightly ahead of the FTSE 100’s annual cash yield of 4%. Also, this payout is at 3.4 times trailing earnings, which I consider a healthy margin of safety.

That said, 2024 is shaping up to be a tougher year for British banks than 2023. Rising consumer prices, high energy bills, and rising taxes have hit household budgets hard. This could lead to a reduction in credit for UK borrowers and an increase in bad debts.

Nevertheless, we intend to hang on to our shares, regardless of what happens to Barclays’ share price in the short term!


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