Tuesday, April 28, 2015

Barclays PLC ADR

Sound bite for Twitter and StockTwits is: Dividend Growth Foreign Bank. This bank certainly has not gotten itself out of trouble yet. However, I am going to continue to hold my shares to see what happens. I do not have that much invested here. A problem holding this bank for dividend income is that dividends are not paid in equal instalments. See my spreadsheet at bcs.htm.

I own this stock of Barclays PLC ADR (NYSE-BCS, LSE-BARC). I bought this stock when Barrett took over in 2000. Barrett used to run Bank of Montreal in Canada. At that time it was a good dividend paying stock and I thought it would give me some geographical diversifications. This is the last foreign stock that I own. Foreign diversification did not really accomplish much for me.

This is a complicated stock to look at. The bank reports in UK pounds. I bought this stock as an American Depositary Receipt (ADR) off the NYSE. There are 4 ADRs for each bank stock. The ADRs are priced in US$. So my spreadsheet covers US$, CDN$ and UK£. If you want more information on ADRs, see notes on Investopedia.

I keep this stock in a US$ account. In US$ I have made 2.62% per year on this stock. I have a capital loss of 3.86% per year and have made dividends of 6.48% per year. I have paid withholding tax on dividends in most years. I have made $17.62 in dividends per share (dividends less taxes) and that equals some 67% of my purchase price.

When all is said and done, I have not done that well on this stock, but I hope that it will improve in the future. Although I think an improvement will take some time. In 2009, they decreased their dividends by 97%, but in the following year they increased them by 350%. There were good increases in 2011 and 2012. However, dividends have not increased in 2013 or 2014.

When I started with this stock, dividends were paid twice a year. There would be a small dividend in October and a big one in March each year. Depending on how the bank did in a calendar year they would declare a final dividend for payment the following March or April. So with this stock you never really knew what the dividends would be.

They have switched to 4 dividend payments but three smallish ones during the year and then a big dividend declared at the end of the year payable the following March or April. If other UK stock pay dividends like this, it must be hard to know exactly what you are going to get in dividends at any one time.

Outstanding shares have increased by 7.7% and 9.8% per year over the past 5 and 10 years. Mostly this is because shares were increased by 36% in 2009 and 32% in 2013. They are also pushing shareholders to take dividends in extra shares rather than in cash.

There is Revenue growth over the past 10 years, but none over the past 5 years. There was a decrease in Revenue in 2014 and analysts seem to feel that there will be not much growth over the next few years. There is no growth in Revenue per Share, EPS or CFPS. Here I am looking at UK pounds, which is the currency this stock is reporting in.

Revenue over the past 5 is down by 3% and over the past 10 years is up by 6.3%. Revenue per Share is down by down by 9.9% and 3.2% per year over the past 5 and 10 years. EPS is down by 15.3% and 7.4% per year over the past 5 and 10 years. CFPS is down by 23.8% and 8.6% per year over the past 5 and 10 years.

The Return on Equity is negative for 2014 because the net income was negative. However, the ROE on Comprehensive Income was positive at 5%. Not a great number, but not negative.

The Debt Ratio at 1.05 is pretty standard for a bank, although most Canadian Banks have a ratio of 1.06 currently. The Leverage and Debt/Equity Ratio are also a bit high at 20.59 and 19.59. By comparison, Canadian Banks have these ratios currently around 17.00 and 16.00 currently.

This is the first of two parts. The second part will be posted on Wednesday, April 29, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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