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It's been a great year so far for most of the major stock markets. The United States S&P 500 The index is up 10% in 2024, while its tech cousin, the Nasdaq Composite, has risen 9.4%. Unfortunately, the UK FTSE 100 is ahead just 3.2% this calendar year. However the Barclays (LSE: BARC) share price has bucked the London trend by rising since 2023.
Barclays beats the market
On the other hand, going back to mid-February, Barclays shares looked weak. On 13 February, the share price closed at 140.48 pence, 9.6% above its 52-week low of 128.12 pence reached on 30 October.
However, since Valentine's Day, Blue Eagle Bank shares have skyrocketed. As I write, on Thursday 4 April, this stock is trading at 193.46p, valuing the group at £29.2bn. That's a 37.7% rise in 51 days, a pretty strong performance for a “boring” FTSE 100 share.
Here's how the Barclays share price has performed on six time scales:
| Five days | 7.7% |
| One month | 13.7% |
| Six months | 25.7% |
| 2023 to date | 25.5% |
| One year | 32.1% |
| Five years | 18.9% |
In fact, the bank's stock has outperformed over all six periods, ranging from one week to five years. What's more, it has outperformed the broader index in one and five years, with the Footsie up 4.4% and 7.1%, respectively.
We bought Barclays for income.
For the record, my wife and I own these stocks as part of our diversified and balanced family portfolio. We paid 154.5 per share for our stake and purchased in July 2022.
To date, the value of our holding in Barclays has increased by 25.3% on paper. However, we buy these stocks for their ability to generate market-beating cash dividends. These totaled 6p per share for 2021, 7.25p for 2022 and 8p for 2023, with the latest installment of 5.3p per share arriving yesterday. Nice.
In other words, Barclays' cash yield is up 25% in two years, an ideal situation for income investors like me.
We have no plans to sell
Despite providing us with decent paper profits and attractive dividends, we have no plans to sell our Barclays shares in the immediate future. This is because I still consider this stock to be relatively cheap, both historically and geographically.
Barclays shares are trading at a multiple of 7.2 times earnings, representing a return of 13.9%. They offer a dividend yield of 4.2% per annum, slightly above the FTSE 100's 4% annual cash yield. Additionally, this payout is covered 3.4 times trailing earnings, which I consider a margin of safety. healthy.
That said, 2024 is shaping up to be a more difficult year for British banks than 2023. Rising consumer prices, high energy bills and rising taxes have hit household budgets hard. This may well lead to lower credit growth and increased bad debts for UK lenders.
Still, we intend to hold on to our shares, regardless of what happens to the Barclays share price in the near term.
