I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS), but I used to. 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.
When I was updating my spreadsheet, I noticed that both revenue and earnings were up in 2018 and the stock price went up this year so far. They also have been increasing the dividend lately. Generally, when a company increases their dividends, especially a sizable amount, it is because the company sees good future growth.
This is a UK bank and dividends are paid and declared in British Pounds (£). This company paid two dividends a year with a larger one in the spring after the prior year results are know and one in the fall. This year, 2019, a dividend was paid in April and the next one due to be paid in September.
The April 2019 dividend is considered to the final dividend of 2018 and the September one to be an interim dividend. The Final dividend is generally greater than the interim one. For example, in 2017 the final dividend paid in April 2017 was for 2p (i.e. 2 pence) and the September 2017 interim dividend paid was for 1p. The year 2018 was untypical with a final dividend less than the interim one.
Note also that if you purchase this stock on the US market, it is purchases as an ADR (American Depositary Receipts). There is 1 ADRs for each 4 UK stock. Therefore when dividends are paid on the ADR, shareholders will get 4 times the rate. The currency exchange rate will also be taken into account.
For this bank, dividends have gone down as well as up and the dividend payment timing has changed. As you can see from the charts below dividend have been declining. The 2008 bear market and recession has been hard on banks. This bank started to rise their dividends again in 2018 and they were increased 100% in 2019 (so far). With the latest dividend increases, dividends are now back to where they were 5 years ago.
The Dividend Payout Ratios for 2018 for EPS 49% with 5 year coverage at 368% UK£. The anticipated DPR for EPS for 2019 is expected to be 30% with 5 year coverage at 85%. The DPR for 2018 for CFPS is 9% with 5 year coverage at 5%.
Debt Ratios are fine. The Deposits/Assets Ratio for 2018 is 0.68. The Deposit/Total Debt Ratio for 2018 is 0.37. Both these ratios are good. The Liquidity Ratio is generally ignored for a bank. The Debt Ratio for 2018 is 1.06 with 5 year median also at 1.06. This is a satisfactory ratio for a bank.
The Total Return per year is shown below for years of 5 to 25 to the end of 2018 in UK Pounds. 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.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | -7.09% | -8.81% | -11.10% | 2.29% |
| 2008 | 10 | -18.31% | 3.01% | -0.19% | 3.20% |
| 2003 | 15 | -9.61% | -3.63% | -7.65% | 4.01% |
| 1998 | 20 | -4.26% | 2.28% | -3.79% | 6.07% |
| 1993 | 25 | 0.68% | 8.73% | 0.10% | 8.64% |
The Total Return per year is shown below for years of 5 to 23 to the end of 2018 in US$. This is a UK bank and the difference between the charts would reflect the difference between the currencies involved.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | -11.79% | -13.98% | -16.09% | 2.12% |
| 2008 | 10 | -19.40% | 0.78% | -2.59% | 3.37% |
| 2003 | 15 | -10.88% | -5.86% | -9.96% | 4.10% |
| 1998 | 20 | -5.41% | 1.11% | -5.32% | 6.42% |
| 1996 | 23 | 0.06% | 7.62% | -1.75% | 9.37% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are -17.7, -20.70 and -23.69. There have been recent earning losses. The corresponding 10 year ratios are 3.28, 6.29 and 9.07. The corresponding historical ratios are 8.40, 10.08 and 12.11. The current P/E Ratio is 7.92 based on a stock price of 169.4p (UK£1.694) and 2019 EPS estimate of 21.4p (UK£0.214). This stock price testing suggests that the stock price is reasonable but above the median.
I get a Graham Price of UK£3.86. The 10 year low, median, and high median Price/Graham Price Ratios are 0.54, 0.68 and 0.84. The current P/GP Ratio is 0.44 based on a stock price of £1.694. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 0.62. The current P/B Ratio is 0.55 based on Book Value of £52.924, Book Value per Share of £3.09 and a stock price of £1.694. The current P/B Ratio is 11% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.
I get an historical median dividend yield of 3.25%. The current dividend yield is 3.84% based on dividends of £0.065 and a stock price of £1.694. The current dividend yield is 18% above the historical median yield. This stock price testing suggests that the stock price is reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.45. The P/S Ratio is 1.34 based on 2019 Revenue estimate for 2019 of £21,722M, Revenue per Share of £1.27 and a stock price of £1.694. The current P/S Ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median.
Results of stock price testing is the stock price is reasonable and below the median. You would think that the stock price would be coming up cheap on testing. Note that for P/E Ratio testing, the ratios are very low especially for 5 and 10 year periods because of earning losses and therefore negative ratios. A P/E Ratio of 7.92 is a very low ratio. It is low compared to the historical ratios.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (4), Hold (5), Underperform (1) and Sell (2). The recommendations are all over the place. The consensus would be a Buy. The 12 month stock price consensus is £2.1322. This implies a total return of 29.70% with 25.87% from capital gains and 3.84% from dividends.
See what analysts are saying about this stock on Stock Chase. One analyst says buy and another one says don’t buy. Interesting. Harvey Jones on Motley Fool likes the dividend yield and the fact that it will increase. A writer on Simply Wall Street likes this bank’s level of leverage and liquidity. There is a Porter Five Forces analysis at Fern Fort University. There is another analysis of this stock at Swot and Pestle.
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.
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