Is it a good company at a reasonable price? Some international banks have had a hard time since 2008 as this one did. This bank seems to be recovering. The stock price on this stock seems to be reasonable at this time.
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. 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.
When I was updating my spreadsheet, I noticed that to do an analysis of this ADR from the US market, I have to use 3 currencies, CDN$, US$ and UK£. So, this is complex. I will not, in the future, buy foreign companies. I will certainly not buy any ADRs in the future because analysis is complex.
I did build my initial portfolio with US and foreign stock as well as Canadian stocks. I also built it from mutual funds which were some of my first investments. I will not go back to US and foreign stock now, just as I will not go back to mutual funds. I belong to a number of investments clubs and certainly, the majority of people in these clubs buy US stocks as well as Canadian stocks.
Because I was dealing in the 3 currencies, I thought it would be interesting to look at the 10 year return in all 3 currencies. This is what my spreadsheet is showing me. According to my spreadsheet, the US$ has gone up by 2.2% per year compared to the CDN$, the UK£ has gone down 2.6% per year against the US$, and the UK£ has gone down 0.46% per year against the CDN$
If you had invested in this company in December 2013, for $1,002.73 you would have bought 52 shares at $19.28 per share. In December 2023, after 10 years you would have received $181.89 in dividends. The stock would be worth $541.95. Your total return would have been $723.84. This would be a total loss of 3.59% per year with 5.97% from capital loss and 2.38% from dividends. This is CDN$.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $19.28 | $1,002.72 | 52 | 10 | $181.89 | $541.95 | $723.84 |
If you had invested in this company in December 2013, for $1,015.28 you would have bought 56 shares at $18.13 per share. In December 2023, after 10 years you would have received $136.40 in dividends. The stock would be worth $441.28. Your total return would have been $577.68. This would be a total loss of 6.08% per year with 7.99% from capital loss and 1.98% from dividends. This is US$
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $18.13 | $1,015.28 | 56 | 10 | $136.40 | $441.28 | $577.68 |
If you had invested in this company in December 2013, for £1,000.36you would have bought 369 shares at £2.71per share. In December 2023, after 10 years you would have received £180.63 in dividends. The stock would be worth £567.45. Your total return would have been £748.07. This would be a total loss of 3.18% per year with 5.51% from capital loss and 2.33% from dividends. This is UK£.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| £2.71 | £1,000.36 | 369 | 10 | £180.63 | £567.45 | £748.07 |
The current dividend yield is moderate with dividend growth currently moderate. The current dividend yield is moderate (2% to 4%) at 3.90% based on the price of BARC on the London Exchange. The 5, 10 and historical dividend yields are also moderate at 3.54%, 2.81% and 3.39%.
Over the past 5 years, the dividend growth is 11.25% per year. The last dividend increase was in 2024 and was for 6%. This bank pays out two dividends in a year, a bigger dividend in the first part of the year based on the previous years result and a smaller dividend near the end of each year. Also, dividend growth is good for last 5 years but this was after dividends were cut. Dividend growth for the past is very low to negative. See Total Return paragraph below.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2023 for Earnings per Share (EPS) is good at 28% with 5 year coverage at 21%. The DPR for 2023 for Cash Flow per Share (CFPS) is not calculable because of negative cash flow with 5 year coverage good at 1.9%. The DPR for 2023 for Free Cash Flow (FCF) is not calculable due to negative FCF with 5 year coverage good at 4.4%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 28.62% | 20.70% |
| CFPS | 0.00% | 1.93% |
| FCF | -45.96% | 4.42% |
Debt Ratios are fine. The Long Term Debt/Covering Assets Ratio for 2023 is good at 0.74. This is the important ratios rather than the Long Term Debt/Market Cap Ratio. The Liquidity Ratio does not apply to banks. The Debt Ratio for 2023 is fine for a bank at 1.05.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R+A | 0.74 | 0.74 |
| Lg Term R | 23.12 | 17.34 |
| Intang/GW | 0.25 | 0.25 |
| Debt Ratio | 1.05 | 1.05 |
The Total Return per year is shown below for years of 5 to 30 to the end of 2023 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 11.34% | 3.55% | 0.43% | 3.12% |
| 2013 | 10 | 1.71% | -3.18% | -5.51% | 2.33% |
| 2008 | 15 | -9.43% | 3.16% | 0.02% | 3.15% |
| 2003 | 20 | -4.78% | -2.27% | -5.69% | 3.42% |
| 1998 | 25 | -1.33% | 2.42% | -2.96% | 5.38% |
| 1993 | 30 | 2.38% | 8.49% | 0.15% | 8.34% |
The Total Return per year is shown below for years of 5 to 30 to the end of 2023 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 11.25% | 3.92% | 0.89% | 3.04% |
| 2013 | 10 | -0.94% | -5.93% | -7.99% | 2.06% |
| 2008 | 15 | -10.26% | 1.65% | -1.44% | 3.10% |
| 2003 | 20 | -5.80% | -4.03% | -7.36% | 3.33% |
| 1998 | 25 | -2.29% | 1.40% | -4.11% | 5.51% |
| 1993 | 29 | 1.84% | 9.14% | -0.33% | 9.47% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.56, 6.31 and 8.42. The corresponding 10 year ratios are 4.38, 6.00 and 7.62. The corresponding historical ratios are 8.04, 9.98 and 12.51. The current P/E Ratio is 6.88 based on a stock price of $10.37 and EPS estimate for 2024 of $1.51. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$.
The 5-year low, median, and high median Price/Earnings per Share Ratios are 4.80, 5.93, 7.29. The corresponding 10 year ratios are 4.68, 5.92, and 7.17. The corresponding historical ratios are 7.11, 10.04 and 11.59. The current P/E Ratio is 6.75 based on a stock price of £2.05 and EPS estimate for 2024 of £0.304. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in UK£.
I get a Graham Price of £5.11. The 10-year low, median, and high median Price/Graham Price Ratios are 0.44, 0.59 and 0.79. The current P/GP Ratio is 0.40 based on a stock price of £2.05. This 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 UK£.
I get a 10-year median Price/Book Value per Share Ratio of 0.53. The current P/B Ratio is 0.54 based on a stock price of £2.05, Book Value of £57,920 and Book Value per Share of £3.82. The current ratio is 1.9% 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 UK£.
I also have an estimate for the Book Value per Share for 2024 of £4.20. This analyst calculates the Book Value differently than I do, and their 10 year median ratios would be 0.43. The BVPS estimate of £4.20 implies a ratio of 0.49 with a stock price of £2.05 and Book Value of £63,651. This ratio is 12% 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 UK£.
I get an historical median dividend yield of 3.39%. The current dividend yield is 3.90% based on dividends of £0.08 and a stock price of £2.05. The current dividend yield is 15% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in UK£. I get a 10 year median dividend yield of 2.53%. The current dividend yield is 3.90% based on dividends of £0.08 and a stock price of £2.05. The current dividend yield is 45% above the 10 year 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 1.38. The current ratio is 1.20 based on Revenue estimate for 2024 of £25,946M, Revenue per Share of £1.71 and a stock price of £2.05. The current ratio is 13% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in UK£.
Results of stock price testing is that the stock price is probably reasonable. The 10 year median dividend yield testing is showing the stock price as cheap. However, dividends lately have been going down as well as up, so I wonder how good this test is. The P/S Ratio testing is showing the stock price as reasonable. Most of the rest of the testing is showing the stock price as reasonable and above and below the median. I am doing most of the testing in UK£ as this is a UK company reporting in UK£.
When I look at analysts’ recommendations, I find Strong Buy (9), Buy (6), Hold (2) and Underperform (1). The consensus would be a Strong Buy. The 12 months stock price consensus is £2.455 with a high of £3.30 and a low of £1.881. The consensus stock price of £2.455 implies a total return of 23.66% with 19.76% from capital gains and 3.90% from dividends.
The last entries on Stock Chase is in 2021 and they are a buy and a sell. Stock Chase gives this stock 1 star out of 5. Alan Oscroft on Motley Fool thinks that this stock, along with the rest of the UK Bank Sector will be erratic for a while yet. Jesse Williamson on Motley Fool thinks now is a good time to buy this stock. This bank put out a press release via CNBC about their 2023 results.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. They have one warning of unstable dividend track record.
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 AtkinsRealis (TSX-ATRL, OTC-SNCAF) ... learn more on Monday, April 29, 2024 around 5 pm.
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