Is it a good company at a reasonable price? I will not be buying this bank again, mostly because I do not want to get involved with foreign stock. The bank’s financial a certainly improving. Analysts are optimistic. A very good sign is the raising of dividends. The stock price certainly is reasonable and is probably cheap.
I do not own this stock of Barclays PLC ADR (LSE-BARC, NYSE-BCS). 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 sold it in 2017 as I had lost faith in this bank making me any money. At that time, I had a total return of 1.25% with a capital loss of 4.92% and dividends of 6.17%. I had had the stock for almost 18 years.
If a Canadian had invested in this company in December 2012, for $1,016.67 you would have bought 59 shares at $17.23 per share. In December 2022, after 10 years you would have received $200.75 in dividends. The stock would be worth $623.29. Your total return would have been $824.04. This is assuming you bought the stock via the NYSE as an ADR. Values are in CDN$.
Note CDN$ was worth more than the US$ in 2012 and now the CDN$ is worth less than the US$. If a Canadian bought this stock in a US$ account you would have made in US$ what an American would have. If you had transferred new CDN$ to a US$ account, as a Canadian you would have made more as it would have cost you less than $17.32 a share in CDN$ to buy a share.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.23 | $1,016.67 | 59 | 10 | $200.75 | $623.29 | $824.04 |
If an American had invested in this company in December 2012, for $1,004.56 you would have bought 58 shares at $17.32 per share. In December 2022, after 10 years you would have received $151.76 in dividends. The stock would be worth $452.40. Your total return would have been $604.16. This is assuming you bought the stock via the NYSE as an ADR. Values are in US$.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.32 | $1,004.56 | 58 | 10 | $151.76 | $452.40 | $604.16 |
If someone invested in this company in in December 2012 in UK£ on the London Exchange (LSE) for £1,002.37you would have bought 382 shares at £2.62per share. In December 2022, after 10 years you would have received £182.41in dividends. The stock would be worth £605.55. Your total return would have been £787.95. Values are in UK£. Also note that there 4 shares on the LSE for each ADR.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| £2.62 | £1,002.37 | 382 | 10 | £182.41 | £605.55 | £787.95 |
When I was updating my spreadsheet, I noticed dividend growth for the past 5 years has changed to a positive number of 15% in UK£. Last year, dividend growth was still negative for all periods. From charts below on Total Return, shareholders have not been making any money.
The current dividend yield is moderate with dividend growth restarting. The current dividend yield is moderate (2% to 4% ranges) at 4.51%. The 5, 10 and historical dividend yields are also moderate at 2.47%, 2.47% and 3.25%. The dividends have growth by 15.8% per year over the past 5 years. However, dividends were suspended in 2020 and then restarted in 2022. Current dividends are now 11.5% higher than they were in 2015. The dividends are still some 79% below what they were in 2008.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2022 is 21% with 5 year coverage also at 21%. The DPR for Cash Flow per Share (CFPS) for 2022 is 1.41% with 5 year coverage at 1.38% with 5 year coverage at 1.28%. The DPR for Free Cash Flow (FCF) for 2022 is 3.6% with 5 year coverage at 4.4%.
Debt Ratios are fine. Long Term Debt/Market Cap Ratio is good at 0.38. Because this is a bank, I am looking at Long Term Debt/Covering Assets Ratio and that is good at 0.71. The Debt Ratio for 2022 is fine at 1.05 which is in the normal range for banks. (Although I note that lately the Canadian Banks are all 1.06 or higher.)
The Total Return per year is shown below for years of 5 to 29 to the end of 2022 in UK£. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 15.81% | -2.58% | -4.84% | 2.26% |
| 2012 | 10 | -0.39% | -2.66% | -4.91% | 2.25% |
| 2007 | 15 | -10.32% | -5.36% | -7.42% | 2.06% |
| 2002 | 20 | -5.24% | 0.28% | -4.21% | 4.48% |
| 1997 | 25 | -1.56% | 0.54% | -3.87% | 4.41% |
| 1993 | 29 | 1.73% | 8.55% | 0.26% | 8.28% |
The Total Return per year is shown below for years of 5 to 29 to the end of 2022 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 9.03% | -4.36% | -6.47% | 2.11% |
| 2012 | 10 | -5.12% | -5.59% | -7.67% | 2.08% |
| 2007 | 15 | -14.32% | -8.62% | -10.38% | 1.76% |
| 2002 | 20 | -7.26% | -0.73% | -5.60% | 4.87% |
| 1997 | 25 | -3.31% | -0.02% | -4.89% | 4.87% |
| 1993 | 29 | 0.34% | 9.16% | -0.38% | 9.54% |
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 6.19, 8.78 and 11.01. The corresponding historical ratios are 8.18, 10.05 and 12.87. The current P/E Ratio is 5.17 based on a stock price of $8.00 and EPS estimate for 2012 of $1.55 (£0.310). The current P/E Ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a Graham Price of $24.11. The 10-year low, median, and high median Price/Graham Price Ratios are 0.53, 0.75 and 0.85. The current P/GP Ratio is 0.33 based on a stock price of $8.00. This ratio is below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
I get a 10-year median Price/Book Value per Share Ratio of 0.56. The current ratio is 0.46 based on Book Value of £55,008, Book Value per Share £3.47 and a stock price of £1.6038. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This test is in UK£ and you will get a similar result in US$.
I get a 10-year median Price/Cash Flow per Share Ratio of 0.57. The current P/CF Ratio is 0.84 based on a stock price of $8.00, Cash Flow per Share estimate for 2023 of $9.50 and cash flow of $37,704M. The current ratio is 47% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$.
I get an historical median dividend yield of 3.25%. The current dividend yield is 4.52% based on dividends of £0.0725 and a stock price of £1.6038. The current dividend yield is 39% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in UK£.
I get a 10 year median dividend yield of 2.47%. The current dividend yield is 4.52% based on dividends of £0.0725 and a stock price of £1.6038. The current dividend yield is 83.05% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap. This testing is in UK£$.
The 10-year median Price/Sales (Revenue) Ratio is 1.50. The current P/S Ratio is 0.97 based on a stock price of $8.00, Revenue estimate for 2023 of 32,598 US$ (£26,137) and Revenue per Share of $30.217. The current ratio is 35% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say this and is confirmed by the P/S Ratio test. I am using UK£ in testing for dividends, because sites I have seen and what the Barclay site says about dividends paid on the ADR differ substantially. Note that each ADR holds 4 shares in Barclays PLC.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (6) and Hold (7). The consensus would be a Buy. The 12 month stock price is $11.38 US$ (£2.2802). This implies a total return of 46.71% with 42.19% from capital gains and 4.52% from dividends. (Note that LSE prices are quoted in pence and I am converting the quote to pounds).
The last entries on Stock Chase for this stock was in 2021, with a Sell and Buy recommendations. Stock Chase gives this stock 1 star out of 5. Alan Oscroft on Motley Fool says the bank’s valuation is low with dividend rising. Dr. James Fox on Motley Fool thinks that Barclays Shares are a buy. The bank has a press release on CNBC about its 20022 results. Simply Wall Street via Yahoo Finance talk about who owns this bank. Simply Wall Street list 2 warnings signs of unstable dividend track record; and significant insider selling over the past 3 months. Simply Wall Street gives this stock 3 starts out of 5.
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 Monday, May 1, 2023 around 5 pm.
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