Friday, April 12, 2013

Barclays Bank PLC ADR

I own this stock of Barclays Bank PLC ADR (UK-BARC, NYSE-BCS). This was one of my forays into international stock. I bought this stock in 2000 and today, I have 3.26% total return per year, with 5.45% per year from dividends and capital loss of 2.19% per year. This valuation is in US$. This stock was doing well until the 2008 crash.

This stock is rather hard to valuate. I bought the stock off the New York market as an ADR. There are 4 UK shares for each ADR. The financial reports are in UK pounds. My stock is priced in US$ and of course, I really earning money only in CDN$. My spreadsheet on this stock has to deal with all three currencies.

With the 2008 crash, our banks have held up rather well, not so much the European Banks. Dividends initially dropped by 97% in 2009. They are up some 550% but they are still some 81% lower than pre-crash levels. Dividends are paid rather differently on this stock than for most Canadian and US stocks. At the end of the year a dividend is decided that can be paid at the first of the following year. At one time I got two dividends each year, with one in April (the large payment) and a final one in October. They have changed the dividends to 4 times a year with a larger one in March and 3 smaller in the other quarters of the year.

Outstanding shares have increased by 13% per year and 6% per year over the past 5 and 10 years. Shares have increased because of Stock Options, Share Issues and conversion of notes into shares. No matter how you look at this stock, there has not been much growth per share values in revenue, earnings or cash flow. Mostly these values have declined. There has been some growth in Book Value per Share at 4.4% and 7.9% per year over the past 5 and 10 years.

For 2012, this bank had an earnings loss. There was positive cash flow if you look at cash flow excluding working capital. Since there was an earnings loss in 2012, there is not a positive ROE. However, one problem I see is that the ROE for 2012 is a negative 0.4%. The ROE for comprehensive income is a negative 1%. This amounts to quite a difference.

The Debt Ratio on this bank is fairly normal at 1.04 although Canadian Banks have been moving this ratio up to 1.06. The Leverage and Debt/Equity Ratios at 27.81and 26.64 are a lot higher than Canadian Banks, but this bank has had these ratios high like this for a long time. (For example these ratios for the Royal Bank are 20.91and 19.75 which is rather normal for Canadian Banks.)

In Canadian Dollar terms, I have lost money for every 5 year period since 2008. Also I have basically just broken even, at the end of 2012 in CDN$ terms. Not a great showing. I plan to continue to hold this stock for the time being and it will be interesting to see if it can recover. See my spreadsheet at bcs.htm.

One of the largest financial services groups in the United Kingdom, Barclays is engaged in banking, investment banking and asset management worldwide. Its web site is here Barclays.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

No comments:

Post a Comment