I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS), but I used to. I would not buy this bank again and certainly not as an ADR. I have to track 3 currencies to do any analysis on this stock as a Canadian. 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.
I noticed that Revenue is still declining. They also had an earnings loss for 2017. The analysts seem to keep thinking revenue and earnings will go up, but they have not yet. For example last year the median estimates for EPS was £0.137, but there was an earnings loss of £.101in 2017. Revenue estimate was £22175M a 3.4% increase, but Revenue was instead down by 1.7% at £21076M
Until 2008, dividends were growing. Since 2008 dividends have been going south. For the past 5, 10, 15, 20 and 24 years dividends have declined by 14.33%, 21.08%, 11.37%, 5.47% and 0.98%.
The simply answer to can they afford their dividends is no. The Dividend Payout Ratio for 2017 is not calculable as there was an earnings loss. The 5 year coverage is 2076.92%. This is not a mistake, as coverage is over 2000%. The last time the DPR for EPS was below 100% was in 2011 when it was at 22.92%. The last time the 5 year coverage was below 100% was in 2014 when it was 62.77%.
The Total Return is show below for years of 5 to 22. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
| Years | Div Gth | Tot Ret | Cap Gain | Div |
|---|---|---|---|---|
| 5 | -14.33% | -2.74% | -4.99% | 2.26% |
| 10 | -21.08% | -6.53% | -8.69% | 2.15% |
| 15 | -11.37% | 0.93% | -4.00% | 4.93% |
| 20 | -5.47% | 0.99% | -3.62% | 4.61% |
| 24 | -0.98% | 9.22% | 1.36% | 7.86% |
The 5 year low, median and high median Price/Earnings per Share Ratios are unusable as they are negative. The 10 year corresponding ratios are all unusable as they are extremely low. The historical low, median and high median Price/Earnings per Share Ratios are 8.40, 10.04 and 12.11. The current P/E Ratio 17.21 based on a stock price of £2.13 and 2018 EPS estimate of £0.124. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of £3.00. The 10 year low, median and high median Price/Graham Price Ratios are 0.47, 0.63 and 0.79. The current P/GP Ratio is 0.71 based on a stock price of £2.13. This stock price testing suggests that the stock price is reasonable but above the median.
I get a 10 year median Price/Book Value per Share of 0.67. The current P/B Ratio is 0.66 based on a Book Value of £54,964, Book Value per Share of £3.22 and a stock price of £2.13. The current P/B Ratio is some 1.4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The thing is that when the P/B Ratio is below 1.00, it means that the stock is selling below the theoretical breakup value of the company. This, of course, suggests that the stock price is cheap. Normally a cheap P/B Ratio is 1.50 and below.
I get an historical median dividend yield of 2.96%. The current dividend yield is 1.41% based on dividends of £0.030 per year with a stock price of £2.13. The current dividend yield is some 52.5% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The problem with using a dividend yield compared to an historical median dividend yield when dividends are going down is not a good test. You would expect lower dividend yield with declining dividends. Of course, it does depend on fast dividends are declining.
The 10 year median Price/Sales (Revenue) Ratio is 1.33. The current P/S Ratio is 1.67 based on 2018 Revenue estimate of £21,786, Revenue per Share of £1.28 and a share price of £2.13. The current ratio is some 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
When I look at analysts' recommendations I find Strong Buy (8), Buy (5), Hold (6), Underperform (1) and Sell (1). The consensus would be a Buy. The 12 month stock price is £2.27. This implies a total return of $7.80% with 6.40% from capital gains and 1.41% from dividends based on a current stock price of £2.13.
Lawrence White and Makini Brice in an article on Reuters talk about this bank paying $2B in Fraud Fine over US Mortgage Backed Securities. Julie Verhage, Stephen Morris and Sonali Basak of Bloomberg talks about Barclays PLC trying gauging clients' interest in the British bank starting a cryptocurrency trading desk. Maria Brooks on Frisco Fastball talks about recent analysts' rating. An Analyst on Post Analyst sees an opportunity in buying this stock. See what analysts are saying about this stock on Stock Chase. One analyst complained that European banks did not repaired themselves after the financial crisis which is unlike the American banks.
Barclays PLC operates in commercial and investment banking, insurance, financial and other related services. Barclays' subsidiary, Barclays Bank PLC maintains 2500 branches in the United Kingdom and 1000 branches in over 75 other countries. Its web site is here Barclays PLC ADR.
The last stock I wrote about was about was Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)... learn more. The next stock I will write about will be SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF)... learn more on Friday, April 20, 2018 around 5 pm. Tomorrow on my other blog I will write about Passion and Retirement.... learn more on Thursday, April 19, 2018 around 5 pm.
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.
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