Sound bite for Twitter and StockTwits is: Dividend Paying Foreign Bank. The stock price is relatively cheap. I would not buy this stock again. The stock price is barely above where it was 26 years ago. Who knows if any dividends will be paid this year. See my spreadsheet on Barclays PLC ADR.
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 is was well that I sold this stock in 2017. In 2000 when I bought the stock, I paid $24.9 US$ for it. It hit a high of $61.84 US$ in 2007, then crashed in 2009 to $3.07 US$. It recovered to $25.39 US$ in 2009, but then continued south to the present day. It did fluctuate but always down. So, I did the right thing to sell in 2017 even though I lost money when I sold it for $9.94 US$. My Total Return to 2000 was 1.25% per year because of dividends.
The dividend yields are moderate with dividend growth all over the place lately. The dividend yields are moderate (2% to 4% ranges). The current dividend yield is 3.29% with 5, 10 and historical dividend yields at 2.48%, 2.47% and 3.39%. The dividend increases were in the good range (15% and higher) before 2007. Since then they have been inconsistent having been increased, decreased and flat at various times.
Barclays PLC had announced last month a dividend increase. They announced this month that they will not pay any dividend in April of this year and will decide at the end of the year whether or not to pay a dividend later in the year. Dividends recently have been paid in April and September. The TD bank’s WebBroker has cut the dividend back to where it was. So, I am going with this at present, but there may not be any dividend this year. See Barclay’s site here.
The Dividend Payout Ratios are not great, but seems to be getting under control. The DPR for 2019 for EPS was 50% with 5 year coverage at 118%. This is because of some recent earnings losses. Analysts expect the DPR for EPS to be lower this year, but who knows as the Bank is not going to announce what they will do until near the end of the year. The DPR for Cash Flow cannot be calculated this year because of a negative cash flow, but the 5 year coverage is low at 5%. The DPR for Free Cash Flow cannot be calculated because of negative FCF.
Debt Ratios are fine. The Deposit/Asset Ratio is good at 0.84. This is a bank, so the Liquidity Ratio is not needed or done. The Debt Ratio is 1.06 and this is fine for a bank. The Leverage and Debt/Equity Ratios for 2019 is 17.37 and 16.37 and these are normal for a bank.
The Total Return per year is shown below for years of 5 to 26 to the end of 2019 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 1.49% | -6.51% | -8.70% | 2.37% |
| 2009 | 10 | 21.48% | -3.55% | -5.96% | 2.41% |
| 2004 | 15 | -7.89% | -7.04% | -9.93% | 3.04% |
| 1999 | 20 | -2.86% | -0.50% | -5.38% | 4.57% |
| 1994 | 25 | 1.16% | 9.96% | 0.31% | 8.83% |
| 1993 | 26 | 2.38% | 9.51% | 0.34% | 8.11% |
The Total Return per year is shown below for years of 5 to 26 to the end of 2019 in US$. 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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | -1.78% | -6.51% | -8.70% | 2.20% |
| 2009 | 10 | 19.02% | -3.55% | -5.96% | 2.41% |
| 2004 | 15 | -9.14% | -7.04% | -9.93% | 2.89% |
| 1999 | 20 | -3.34% | -0.50% | -5.38% | 4.88% |
| 1994 | 25 | 0.49% | 9.96% | 0.31% | 9.66% |
| 1993 | 26 | 1.90% | 9.51% | 0.34% | 9.17% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.88, 11.24 and 13.60. The corresponding 10 year ratios are 7.30, 10.51 and 13.24. The corresponding historical ratios are 8.63, 10.12 and 12.94. The current P/E Ratio is 7.81 based on a stock price of $4.55 and 2020 EPS estimate of $0.58 (£0.117). This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a Graham Price of $14.58. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 072 and 0.85. The current P/GP Ratio is 0.32 based on a stock price of $4.55. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median Price/Book Value per Share Ratio of 0.62. The current P/B Ratio is 0.29 based on a Book Value of £54,797M, Book Value per Share of £3.16 and a stock price of £0.91. The current P/B Ratio is 53% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in UK£. You get a similar result in US$.
I get an historical median dividend yield of 2.96%. The current dividend yield is 3.28% based on dividends of $0.15 (£0.030) and a stock price of $4.55. The current dividend yield is 11% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 2.40%. The current dividend yield is 3.28% based on dividends of $0.15 (£0.030) and a stock price of $4.55. The current dividend yield is 37% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 1.45. The current P/S Ratio is 0.77 based on 2020 Revenue estimate of £20,464M, Revenue per Share of £1.18 and a stock price of £0.91. The current ratio is some 47% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in UK£. You get a similar result in US$.
Results of stock price testing is that the stock price is relatively cheap. I, of course, like the P/S Ratio test which shows the stock as cheap. The dividend yield test is not that reliable when dividend fluctuate. I see no problems with the other stock price tests.
Is it a good company at a reasonable price? I am glad I sold this stock. I would not buy it again. One problem was that it was hard to count on what you would get in dividends. Another was that buying international stocks can be complicated. This was an ADR on the NYSE. There were 4 UK shares for each ADR share. Here I had to deal with three currencies of UK£, US$ and CDN$. Dividends were paid in UK£ which were then changed into US$. At least I had a US$ account to keep this stock in. The stock price is cheap.
Dividend payments do not work in the UK as in Canada or the US. When I invested in the company, I got each year a final dividend which was decided after the year end (paid in April each year) and an interim dividend (paid in October each year). The final dividend was much larger than the interim one. I never really knew how much I would get.
In 2010 the company switched to quarterly dividends. The first dividend paid (called final dividend) was paid early in the year based on the previous year’s results. Then were three smaller interim dividends (which you would know about ahead of time). The interim dividends were always a lot smaller than the final. In 2016, the bank switched back to semi-annual dividends.
When I look at analysts’ recommendations, I find Strong Buy (12), Buy (2), Hold (7), Underperform (1) and Sell (1). The consensus would be a Buy. The 12 month target price is UK£ 1.5349. This implies a total return of 71.64% with 68.36% from capital gains and 3.28% from dividends. However, dividends may or may not be paid.
Rachael FitzGerald-Finch on Motley Fool finds this bank still attractive. Michael Baxter on Motley Fool says this is an appealing UK bank. A writer on Simply Wall Street says insiders are buying. Marion Hillson on The Enterprise Leader says this bank has a consensus recommendation of a Hold. Philip Whiterow on Proactive talks about UK banks told to stop dividends and bonus payments due to coronavirus crisis.
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 Wednesday, April 22, 2020 around 5 pm. Tomorrow on my other blog I will write about Owning a Home.... learn more on Tuesday, April 21, 2020 around 5 pm.
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