Is it a good company at a reasonable price? The stock price is probably cheap. I sold this stock because I had lost hope in it recovering anytime soon. The EPS and Dividends have been making a recover, but the Revenue has not. Revenue has only increased by 0.5% per year in the past 5 years and is down by 4% per year over the past 10 years. I would not been buying any foreign stock anytime soon as is difficult.
I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS), but I used to. This is one of the foreign stocks I was into before 2008. Unfortunately, it was hit hard my 2008 problems and I finally sold it in 2017 at a loss. I had lost hope that it would recover anytime soon. I had a capital loss of 4.92% per year. However, this stock did pay dividends, so my total return was 1.25% per year as I had 6.17% from dividends each year. This was an ARD in US$ so, it was in my US$ account.
When I was updating my spreadsheet, I noticed that this bank earned a lot more than expected in EPS of £0.363 when estimate was £0.170. If you look at the spreadsheet, all you see a lot of red. This is because Revenue, EPS, and Dividends has been declining. Also, this case shows the problems of buying ADRs. My spreadsheet is dealing with 3 currencies of US, UK and CDN.
If you were Canadian and bought the US ADR in CDN$, and you had invested in this company in December 2011, $1,005.91 CDN$ you would have bought 90 shares at $11.18 CDN$ per share. In December 2021, after 10 years you would have received $303.25 CDN$ in dividends. The stock would be worth $1180.96 CDN$. Your total return would have been $1,484.20 CDN$.
If you were Canadian and bought the US ADR in US$ (i.e., in an US$ account), and you had invested in this company in December 2011, $1000.09 US$ you would have bought 91 shares at $10.99 US$ per share. In December 2021, after 10 years you would have received $253.82 US$ in dividends. The stock would be worth $941.85 US$. Your total return would have been $1,195.67 US$.
If you bought this company in UK£ and you had invested in this company in December 2011, £1,001.72 you would have bought 569 shares at £1.76 per share. In December 2021, after 10 years you would have received £273.12 in dividends. The stock would be worth £1,064.03. Your total return would have been £1,337.15.
Note that each ADR represents 4 ordinary shares. I have used the current exchange rates at the time of purchase and each dividend payment. I thought it might be interesting to look at all three currencies and this stock.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.18 | $1,005.91 | 90 | 10 | $303.25 | $1,180.96 | $1,484.20 |
| $10.99 | $1,000.09 | 91 | 10 | $253.82 | $941.85 | $1,195.67 |
| £1.76 | £1,001.72 | 569 | 10 | £273.12 | £1,064.03 | £1,337.15 |
The dividend yields are moderate with dividend growth in the past were moderate to good. The current dividend yield is moderate (2% to 4% ranges) at 4.05%. The 5 year median dividend yield is low (below 2%) at 1.78%. The 10 year and historical median dividend yields were moderate at 2.47% and 3.12%. Note that there were no dividend payments in 2020.
Past increases varied a lot and sometimes were under 15% and sometimes were over 15%. This bank is currently paying two dividends a year. Dividends are declared in UK pence. Generally, but not necessarily so, a bigger dividend payment at the beginning of the year after the year end (in April) and then a smaller dividend near the year end (September). Sometimes the bigger dividend is at the year end (September). They do not pay dividends like US and Canadian firms with quarterly dividends. The dividends are never equal.
The Dividend Payout Ratios (DPR) are currently fine. The DPR for EPS for 2021 was 8% with 5 year coverage at 30%. The DPR for Cash Flow per Share (CFPS) for 2021 was 0.6% with 5 year coverage at 1.6%. The DPR for Free Cash Flow (FCF) is 7% with 5 year coverage at 29%.
Debt Ratios are fine. Because this is a Bank, I am looking at Deposit/Asset Ratio and for 2021 it is good at 0.75. The Debt Ratio for 2021 is 1.05 and this is fine for banks.
The Total Return per year is shown below for years of 5 to 28 to the end of 2021 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. |
|---|---|---|---|---|---|
| 2016 | 5 | -7.79% | -2.71% | -4.34% | 1.63% |
| 2011 | 10 | -5.88% | 3.34% | 0.61% | 2.73% |
| 2006 | 15 | -13.81% | -6.87% | -8.68% | 1.81% |
| 2001 | 20 | -8.21% | -1.55% | -5.01% | 3.47% |
| 1996 | 25 | -3.79% | 4.96% | -1.15% | 6.12% |
| 1993 | 28 | -0.84% | 8.76% | 0.87% | 7.90% |
The Total Return per year is shown below for years of 5 to 28 to the end of 2021 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. |
|---|---|---|---|---|---|
| 2016 | 5 | -6.09% | 0.51% | -1.21% | 1.72% |
| 2011 | 10 | -7.19% | 2.06% | -0.60% | 2.66% |
| 2006 | 15 | -15.51% | -9.28% | -10.87% | 1.58% |
| 2001 | 20 | -8.58% | -2.00% | -5.72% | 3.72% |
| 1996 | 25 | -4.58% | 4.19% | -2.01% | 6.20% |
| 1993 | 28 | -1.19% | 9.43% | 0.62% | 8.81% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.18, 11.24 and 13.60. The corresponding 10 year ratios are 5.95, 7.98 and 9.67. The corresponding historical ratios are 8.28, 10.12 and 12.94. The current P/E Ratio is 6.75 based on a stock price of $7.63 and EPS estimate for 2022 of $1.13 US$. The current ratio is between the low and median of the 10 year ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in US$.
I get a Graham Price of $21.09. The 10 year low, median, and high median Price/Graham Price Ratios are 0.53, 0.72 and 0.85. The current P/GP Ratio is 0.36 based on a stock price of $7.63. The current ratio is below the low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median Price/Book Value per Share Ratio of 0.59. The current P/B Ratio is 0.42 based on a Book Value of $76,974M, Book Value per Share of $18.38 and a stock price of $7.63. The current ratio is 29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
We also have an estimate for the Book Value per Share for 2022 which is $18.46. The ratio based on this estimate is 0.41 with a stock price of $7.63 and a Book Value of $77,291M. Here the ratio is also 29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median Price/Cash Flow per Share Ratio of 0.47. The current P/CF Ratio is 0.51 based on Cash Flow for last 12 months of $62,871M, Cash Flow per Share of $15.01 and a stock price of $7.63. The current ratio is 9% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$.
I get an historical median dividend yield of 2.71%. The current dividend yield is 4.04% based on dividends of $0.3084 and a stock price of $7.63. The current ratio is 49% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10 year median dividend yield of 2.40%. The current dividend yield is 4.04% based on dividends of $0.3084 and a stock price of $7.63. The current ratio is 68% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
The 10 year median Price/Sales (Revenue) Ratio is 1.50. The current P/S Ratio is 1.13 based on Revenue estimate for 2022 of $28,231M, Revenue per Share of $6.74 and a stock price of $7.63. The current ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio test. Most of the other testing says the same thing, but some do say the stock price is most likely reasonable.
I did the testing is US$ because my readers are mostly Canadian and a way most Canadians will buy this stock is an ADR on a US exchange, but we can also now buy on different foreign exchanges. However, if I did the testing in UK Pounds, the results would be the same.
When I look at analysts’ recommendations, I find Strong Buy (9), Buy (3), Hold (9) and Sell (1). The consensus would be a Buy. The 12 month stock price is 11.37 US$ (221.25 GBX or £2.21 as UK stock is quoted in pence). This implies a total return of 53.06% with 49.02% from capital gains and 4.04% from dividends.
There are two analysts’ comments on Stock Chase that are visible. One says that European banking is difficult. Stock Chase gives this stock 3 stars out of 5. Rich Smith on Motley Fool talks in March why this bank’s stock fell. Bram Berkowitz on Motley Fool in September last year gives a reason to buy this stock. This bank’s fourth quarter results are published on CNBC.
Barclays PLC is a major global banking and financial services company. With 325 years of expertise in banking, and operating through an international network in many countries and regions in Europe, the U.S., Africa & Asia, the company provides a wide range of financial services to individuals, corporations and institutions. 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 29, 2022 around 5 pm. Tomorrow on my other blog I will write about Sustainable Investing.... learn more on Thursday, April 28, 2022 around 5 pm.
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