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19 September 2021
12:02 hour

Is the Lloyds (LLOY) share price a bargain or a value trap?

The Motley Fool UK

14/09/2021 - 16:31

Despite a 66% increase in the Lloyds share price over the past year, it trades as a penny stock. Our writer considers whether it is a bargain - or not. The post Is the Lloyds (LLOY) share price a bargain or a value trap? appeared first on The Motley Fool UK.


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  1. FTSE 100 bargains: the shares I’m looking to buy now (16/09/2021 - The Motley Fool UK)
    After falling to 5190.78 points as lockdown was announced, the FTSE 100 has seen a strong post-pandemic recovery, trading at 7047.59 points at the time of writing. Despite this improvement, it is still sitting below its pre-Covid-19 peak, and the recovery hasn’t been felt equally across all sectors: since 2020, Rightmove and Ocado have seen all-time share price highs, whilst Rolls-Royce saw a 15-year low. This leaves me wondering if there is still scope to grab a bargain share. Looking for a FTSE 100 bargain share is a tricky business, and low price certainly isn’t enough of an indication of ‘good value’. Low prices can indicate that a firm is in (sometimes terminal) decline, and I’m always keen to look out for other indications of quality like sales, earnings, cashflow, debt and future prospects. My first thought is that IAG (LSE: IAG) could represent a bargain FTSE 100 share. It was hit hard as flights were grounded and the share price has plummeted to 141.72p at the time of writing. But despite continued disruption to the aviation industry, IAG seems to be adapting: its losses are lower than at this point last year, and it has a strong cash position. As a primarily long-haul carrier, it should also benefit when EU-US routes resume. But there are considerable risks: the airline industry is very vulnerable to continued restrictions, and it is not clear whether consumer travel tastes will return to the old normal any time soon. But I am hopeful that IAG will weather the storm: the group is looking to start short-haul operations out of Gatwick, which should allow it to compete with short-haul airlines like Ryanair, who have seen a smoother recovery. I think that the banking sector could also be a good source of FTSE 100 bargain shares, and I am keeping a keen eye on the Lloyds (LSE: LLOY) share price. At 44.65p, it is still down 30% on its pre-pandemic high, and has the dubious honour of being the cheapest stock on the FTSE 100. But as all investors know, low price doesn’t mean good value and Morgan Stanley downgraded its price target for Lloyds last week. The banking sector had a difficult year, with the Bank of England placing restrictions on bank dividends and buybacks. However, these were lifted in June, providing a vote of confidence that UK bank capital positions are looking strong. I’m also encouraged to see that Lloyds has restored its (meagre!) dividend, and its price-to-earnings ratio is attractively low, at 6.81. Banks tend to be very pro-cyclical, so again, a share price recovery is going to hinge on the pandemic’s continued retreat. However, if we continue to see high demand for mortgages and loans as the economy recovers, I think that Lloyds could be well placed to benefit. Overall, IAG and Lloyds look like they could be bargain FTSE 100 shares for me to buy now. But I will need to hold my nerve: they are both vulnerable to further Covid-19 restrictions and a weak post-pandemic recovery. I hope that fortune will favour the brave! The post FTSE 100 bargains: the shares I’m looking to buy now appeared first on The Motley Fool UK. Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices Make no mistake… inflation is coming. Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing. Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question. That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… …because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not! Best of all, we’re giving this report away completely FREE today! Simply click here, enter your email address, and we’ll send it to you right away. More reading After crashing 35%+ in 6 months, is the IAG share price too low? Lloyds Banking Group shares: bull vs bear 3 FTSE 100 shares to buy and hold for a decade Is this more bad news for the IAG share price? Or is it time to buy? Is the Lloyds (LLOY) share price a bargain or a value trap? Hermione Taylor does not have a position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group, Ocado Group, and Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  2. The Lloyds share price is up 96% since October. Would I buy today? (21/06/2021 - The Motley Fool UK)
    So far, 2021 has been a good year for Lloyds Banking Group (LSE: LLOY) shareholders. Lloyds shares ended 2020 at 36.44p. As I write, this FTSE 100 stock trades around 46.97p. That’s a gain of 10.53p, for a year-to-date rise of almost three-tenths (28.9%). However, the Lloyds share price has been very volatile over the past 12 months, so where might it go next? The Lloyds share price zig-zags The Lloyds share price has seen pretty steep and sharp moves over 2020/21. Nine months ago, on 22 September 2020, the shares slumped to a 52-week intra-day low of 23.58p. This followed news that the UK would enter another lockdown, this time over winter. Obviously, these restrictions were bad news for the UK’s largest consumer lender and its customers. But then came ‘Vaccine Monday’ (9 November 2020), with good news of several effective vaccines against Covid-19. After this welcome shot in the arm, the Lloyds share price took off like a rocket. By the end of 2020, it was 12.86p higher — more than half (+54.5%) above its 2020 low. However, by 29 January 2021, it slipped to close at 33p. To me, this looked like a bargain price to buy into a Big Five bank. This proved to be so, as the shares soared to hit an intra-day high of 50.56p on 1 June. That’s a gain of 17.56p and an uplift of more than a third (+34.7%) in four months. However, as worries about inflation recently unnerved markets, LLOY has fallen back to below 47p today. What next for LLOY? Today, the Lloyds share price stands 7.6% below its 52-week high set three weeks ago. At this level, I still see value in this £33bn bank. After all, the group should benefit from the UK economy fully opening up a month from now. Also, in spite of Covid-19, the UK economy is growing, which is good news for cyclical companies. Furthermore, Lloyds’ balance sheet is strengthening, plus its shares trade at a deep discount to their underlying net asset value (NAV). In addition, after suspending its dividend in 2020, Lloyds has reinstated it, albeit at a much lower level. So far, the only cash dividend paid to shareholders was 0.57p a share on 25 May. Of course, the growth of this dividend will be a key driver of the future Lloyds share price (the faster, the better). But I suspect it won’t be plain sailing from here for LLOY and its long-suffering shareholders. That’s because share prices don’t rise in straight lines, just as trees don’t grow straight to the sky. The world walks a tightrope For me, a multi-year economic boom would be great news for the Lloyds share price. But this widely anticipated event may not materialise quite as planned. Already, we’ve seen multiple variants of Covid-19, with some deadlier and more transmissible than the original virus. If new coronavirus infections outweigh global vaccination efforts, then the world could be plunged into a third wave and further lockdowns. Obviously, this would be grim news for us all. I don’t own this FTSE 100 share at present. However, on balance, I’d be a buyer with the Lloyds share price below 47p. Indeed, with a following wind, I expect it to hit 60p in 2021/22, as do several of my colleagues. Hence, I’d willingly buy LLOY today for rising dividend income and future capital gains. The post The Lloyds share price is up 96% since October. Would I buy today? appeared first on The Motley Fool UK. Our 5 Top Shares for the New “Green Industrial Revolution" It was released in November 2020, and make no mistake: It’s happening. The UK Government’s 10-point plan for a new “Green Industrial Revolution.” PriceWaterhouse Coopers believes this trend will cost £400billion… …That’s just here in Britain over the next 10 years. Worldwide, the Green Industrial Revolution could be worth TRILLIONS. It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Access this special "Green Industrial Revolution" presentation now More reading My 3 favourite UK shares to buy now Why is the Lloyds share price falling? The Lloyds share price is falling in June. Here’s why I’d buy more 3 UK penny stocks I’d buy for my ISA 2 UK shares to buy now with £2,000 Cliffdarcy does not own shares in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
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  3. LLOY - Hold or Sell? (05/09/2021 - Reddit Stocks)
    Due to naivety in years gone by, I am holding a large amount of Lloyds shares worth around 50% of my portfolio. I bought again after COVID hit to bring down my average. My current buy average is 57p. When dividends (reinvested) are factored in, I need to sell for 46p to break even. Current LLOY price is 43.4p. I am aware that I desperately need to diversify. I don’t have a need for this money in the next 5 years. Should I: a) hold in the hope that dividends/share price improves b) sell all to break even and move to diversified investments c) sell part of investment to break even Thanks!   submitted by   /u/jak516 [link]   [comments]
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  4. The Lloyds share price has doubled since September. Can it keep going? (17/05/2021 - The Motley Fool UK)
    For shareholders of Lloyds Banking Group (LSE: LLOY), 2021 has been a much better year than 2020. The Lloyds share price has been climbing steadily since late January. In my view, there could be more to come. The Lloyds share price is on a roll The Lloyds share price ended 2020 at 36.44p, having ridden a roller-coaster last year. By 29 January, it had declined to its 2021 closing low of 33p. That left it down almost a tenth (9.4%) since New Year’s Eve. The very next day, I said that I could see LLOY hitting 50p in 2021/22. Since then, Lloyds shares have been rising steadily — and almost in a straight line. On Friday, the Lloyds share price closed at 48.25p, just 1.75p below the 50p target I expected it to reach. That’s a gain of 15.25p — almost half (+46.2%) — since I said that “the Lloyds share price offers a positive skew of reward versus risk”. But, given the success of the UK’s vaccination programme, I think it might go higher. LLOY has nearly doubled from its 2020 low Of course, 2020 was a horror show for the Lloyds share price and shareholders in the Black Horse bank. At the end of 2019, LLOY closed at 62.5p. However, as the pandemic exploded worldwide, the stock went into meltdown. At their 2020 low, the shares closed at 23.98p on 21 September. Ouch. On 24 September, with the Lloyds share price languishing at 24.58p, I said that “I still believe that this FTSE 100 survivor is cheap as chips, so I would happily buy and hold its shares today.” Since then, this FTSE 100 stock has almost doubled (+96.3%). Furthermore, Lloyds’ market value was just £17.4bn back then, prompting me to say that “I’d happily pay this sum…to buy Lloyds outright.” Today, this Big Five bank is valued at £34.2bn, so my prediction was spot on. What could drive LLOY higher in 2021/22? As one of the UK’s leading lenders, Lloyds has endured a tough 15 months. But, thanks to Covid-19 vaccines, the UK economy is expected to rebound from this summer. However, with the shares at the top of their 52-week range, what could drive LLOY higher still? I see four potentially positive drivers for the Lloyds share price. First, as a highly pro-cyclical stock, a multi-year economic boom would be great news for it (and the UK). Second, if bad debts and loan losses remain low, then the bank may release more of its huge 2020 loan-loss reserves. Third, if inflation (rising consumer prices) starts to pick up, this might mean higher interest rates. And higher rates could mean a higher NIM (net interest margin) for Lloyds. Fourth, Lloyds will pay a modest cash dividend of 0.57p a share on 25 May. But when the bank’s profits and cash flows eventually recover, this dividend could multiply. Of course, my optimistic outlook for the Lloyds share price relies on one key factor: a sustained post-Covid recovery. But if vaccination programmes are less effective than hoped, or more new Covid-19 variants emerge, then this would be a bitter blow for humankind. In this scenario, the outcome might be more infections, higher unemployment, lower consumer spending and falling corporate profits. This outcome would undoubtedly be bad news for UK share prices, especially bank stocks. Still, and on balance, I’d be happy to back Lloyds at current price levels! CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 5 reasons I think Lloyds share price can touch 60p The Lloyds share price is up 60% in a year! And I still think it’s good value Will the Lloyds share price hit 60p this year? Is the Lloyds share price cheap enough for me to buy the stock? If I could only invest in one banking stock, I would buy Lloyds shares Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price has doubled since September. Can it keep going? appeared first on The Motley Fool UK.
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  5. The Lloyds share price is up 60% in a year! And I still think it’s good value (14/05/2021 - The Motley Fool UK)
    I’m delighted to see the Lloyds Banking Group (LSE: LLOY) share price stage such a strong recovery. I’ve previously hailed the FTSE 100 stock a bargain, but it’s also made me nervous and some days I wouldn’t have touched it at all. In April last year, I said the Lloyds share price looked like an unmissable bargain, trading below 30p, but you’d need nerves of steel to buy it. It now stands at 46p, so anybody who rose to the challenge will have been amply rewarded. Yet my ambivalence continued. In October, just before November’s vaccine breakthroughs, I noted that the Lloyds share price had lost 95% of its value since peaking at 591p just before the financial crisis. Despite that, it remained the UK’s most traded stock and I wondered if Britons had lost their minds over it. Me included. This FTSE 100 stock is tempting The Lloyds share price was hammered by the pandemic, through no fault of its own. Big banks are hardwired into the wider economy. So when the government shut down the economy to contain Covid, banking stocks crashed. Unlike the financial crisis, this time the banks aren’t to blame. This recession is government mandated. Officials also mandated that banks stop paying investors dividends, a dictat now rescinded. The Bank of England also slashed interest rates to 0.1% to bail out the economy, but this destroyed net interest margins, the difference between what banks pay to savers and charge borrowers. The Lloyds share price was also hit by fears of rising debts and impairments.  Then came those vaccines and the great Lloyds share price recovery began. It’s been given a further shot in the arm by the end of Brexit uncertainty. The bank’s heavy exposure to the underperforming UK economy was seen as a weakness. Thanks to the nation’s vaccine success, and easing of Brexit tensions, this is now seen as a strength. The Lloyds share price looks good value With the UK opening up, the Lloyd’s share price has been on a tear. The big worry now is that the reopening may be threatened by the new Indian variant. While I believe we should be able to contain it, due to our vaccines and efficient genome tracing, there’s no guarantee. I’m also worried that the housing market may be overheating. A crash would hit all the banks, but especially Halifax-owner Lloyds. Inflation fears are a double-edged sword. If it forces up interest rates that will slow the recovery. But this will also allow Lloyds to increase net margins. Despite these concerns, the Lloyds share price still looks like a bargain to me, trading at 7.8 times forward earnings and with a price-to-book ratio of 0.7. It also offers a projected yield of 4.4%, covered 2.9 times by forward earnings. I’d buy with the aim of holding for the long term, and reinvesting all my dividends for growth. This also grabs me. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Will the Lloyds share price hit 60p this year? Is the Lloyds share price cheap enough for me to buy the stock? If I could only invest in one banking stock, I would buy Lloyds shares Lloyds’ share price is rising. Should I buy today? As the Lloyds share price stays cheap, I’d invest £5k Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is up 60% in a year! And I still think it’s good value appeared first on The Motley Fool UK.
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  6. The Lloyds share price: what do the latest results mean? (26/02/2021 - The Motley Fool UK)
    As a Lloyds Banking Group (LSE: LLOY) shareholder, dividends are all I’ve had to compensate me for a falling share price. Until last year, that is, when the banks suspended their dividends in the face of the Covid-19 pandemic. That certainly didn’t help the Lloyds share price, and it had crashed hard by the autumn. But this week’s results brought the news that I, and many others, had been hoping for. Lloyds has reinstated its dividend. None of the UK’s big banks actually came close to any liquidity crisis. And, speaking of its “strong capital position“, Lloyds revealed a 2020 dividend of 0.57p per share. With a yield of just 1.5% on the current Lloyds share price, that might seem miserly. But the bank explained that it is “the maximum allowed under the regulator’s guidelines“. In the short term, some might be disappointed that regulators are restricting the free market. But for the long term, it doesn’t really bother me too much. It would have been nice to know how much Lloyds would have paid had it enjoyed full freedom. But I do think the bank’s fundamentals will come through in the end, though there’s a big question over how long it might take. Liquidity is key What’s Lloyds’ liquidity like now? We’re looking at a CET1 ratio of 16.4% before dividends, and 16.2% after. Compared to the bank’s target of 12.5%, things look healthy on that score at least. What would I do now if I did not hold Lloyds shares? Coming to Lloyds afresh today, judging it as a potential new investment, I’m really not sure. I’m looking at a very different company to when I originally invested. When I bought, profits were strengthening and analysts predicted steady growth. And the Lloyds share price was on a modest price-to-earnings ratio. Today, I have far less idea what Lloyds’ long-term profit outlook will be like. Forecasts are not dependable at the best of times. But right now, with the long-term economic damage caused by the pandemic (oh, and by Brexit) far from known, I place little value on forecasts. Lloyds share price valuation In turn, valuations based on popular fundamentals don’t mean a lot to me now. When those fundamentals are so uncertain, any valuation calculations I can come up with are close to meaningless. So whatever Lloyds’ forecast P/E for 2021 might be (and I haven’t even worked it out), it would tell me pretty much nothing. So I can’t decide whether the Lloyds share price is a bargain. And then, my main reason for buying was the dividend. That had come back and I was looking forward to a long run of steady annual increases. Today, I’m still happy with Lloyds key liquidity ratios and I expect a better dividend to come. But I can’t even guess when. Current PRA guidance, which pegs back how much Lloyds should pay today, takes its risk-weighted assets into account. And the risk of assets turning bad over the course of the next year is a big unknown. I certainly don’t intend to sell at the current Lloyds share price. But I was waiting for these results to help me decide whether to buy more. I’m going to hold off. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Stock market recovery: 3 UK shares to buy today The Lloyds share price: would I buy the stock today? The Lloyds share price spiked to 41p before falling today! Would I buy LLOY now? Lloyds Bank brings dividends back. Is it a good share for me to buy now? Shares to buy now: why I’d consider Lloyds Banking Group alongside this FTSE 100 stock Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price: what do the latest results mean? appeared first on The Motley Fool UK.
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  7. Will the Lloyds share price ever rise above 50p again? (19/09/2021 - The Motley Fool UK)
    Until the stock market crashed in February 2020, Lloyds Banking Group (LSE: LLOY) hadn’t traded below 50p since 2013. I used to see this as a useful value indicator — if the Lloyds share price was close to 50p, I’d be happy to buy the stock. That’s all changed over the last 18 months. Lloyds shares fell as low as 24p last year and have only got close to 50p once, earlier this summer. With the shares now yielding 5%, I’ve been taking a closer look to see if now’s the right time to buy. Here’s what I’ve found. Why are Lloyds’ shares falling? It was all looking so good earlier this year. The UK economy was recovering more quickly than expected from the impact of Covid-19, and the housing market was booming. Lloyds’ financial performance was ahead of expectations. The bank’s share price was rising steadily towards pre-pandemic levels. However, market watchers will know that Lloyds’ share price has drifted steadily lower since the start of June. After briefly touching 50p, the shares have fallen by 10% to around 45p. What’s gone wrong? Nothing really. The problem is that City analysts expect the bank’s profits to peak at £5.2bn this year, before falling to around £4.2bn in 2022 and 2023. The stock market always looks forward. If a company’s profits are expected to fall, then its shares are likely to be rated cheaply by investors. I think that’s what’s happened here. Lloyds shares are now trading below their book value and on a multiple of just six times 2021 forecast earnings. This could be a bargain It’s worth noting that although Lloyds profits are expected to fall, analysts still expect steady dividend growth. This seems reasonable to me — the bank has plenty of surplus capital and the current payout’s covered around three times by earnings. I can see room for growth. As a result, I think Lloyds could be a good income play at current levels. If broker forecasts are correct, anyone buying Lloyds shares at the current price could see their dividend yield reach 6% in 2023. The market wants growth In the meantime, new chief executive Charlie Nunn is focusing on two main areas to generate growth and improve profitability. The first is wealth management — selling asset management services to wealthy individuals. The second is a more dramatic shift. Lloyds aims to become one of the UK’s largest residential landlords, building and renting up to 50,000 homes. I agree that renting properties could generate higher returns than mortgages, but I also think this strategy carries some risks. If Lloyds’ property arm fails to deliver a good service, it could damage the bank’s wider reputation with consumers. Lloyds share price: buy, sell, or hold? I have some concerns about Lloyds’ property ambitions, but I see this as a fairly safe investment overall. Although profits are expected to dip next year, over time I expect Lloyds to make progress. In the meantime, I’d be happy to sit back and pocket the bank’s generous 5% dividend yield. On balance, I think Lloyds share price will rise above 50p again at some point. With the shares trading below this level, I’d be happy to buy this stock for my portfolio. The post Will the Lloyds share price ever rise above 50p again? appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading How I’d invest £750 into 3 cheap stocks today FTSE 100 bargains: the shares I’m looking to buy now Lloyds Banking Group shares: bull vs bear 3 FTSE 100 shares to buy and hold for a decade Is the Lloyds (LLOY) share price a bargain or a value trap? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  8. The Lloyds share price drops 15% since June. Time to buy? (09/09/2021 - The Motley Fool UK)
    Anyone enjoying the excitement of roller-coaster rides could experience the thrills and spills of being a Lloyds Banking Group (LSE: LLOY) shareholder. Since late 2019, the Lloyds share price has oscillated as wildly as any white-knuckle ride at Thorpe Park. The Lloyds share price slumps and jumps Over the past five years, the Lloyds share price has rarely held above the 72p mark. For example, in late May 2017, the price briefly closed over 73p, before falling back. At end-2019, before coronavirus went global, the shares closed the year at 62.5p. At its 2020 peak, weeks before Covid-19 crashed global stock markets, LLOY hit an intra-day high of 63.84p. But then came the crash peaking on ‘Meltdown Monday’ (23 March 2020), when stock prices collapsed globally. And as investors braced themselves for the deepest recession in modern history, the Lloyds share price almost imploded. After plunging below 28p in April and May, it went on to hit a lifetime low in the autumn. On 22 September 2020, it slumped to an intra-day low of 23.58p — a price almost unimaginable just 12 months earlier. On 30 October, just before Halloween, the Lloyds share price closed at 28.03p. But then came ‘Vaccine Monday’ (9 November 2020), when news of highly effective Covid-19 vaccines set stocks alight. Lloyds’ stock promptly went on to almost double, soaring to hit its 2021 intra-day peak of 50.56p on 1 June. That’s a return of more than four-fifths (80.4%) in seven months — not bad for a ‘boring’ value stock. Why I’d buy today Since peaking in early June, the Lloyds share price has retreated recently. LLOY is down 3% over five days, 8.5% over one month and 13% over three months. Of course, there is often a summer lull when London share prices wilt during the hottest months. But the Black Horse bank’s shares have suffered more than most during this summer slump. I don’t own Lloyds stock today, but I would happily buy at the current share price of 42.5p. This values the entire group at a mere £30.2bn. For me, this is a very reasonable price tag to buy a leading UK bank with 65,000 workers and 30 million customers. Furthermore, Lloyds comes with a long history. LBG was created in January 2009, following a ‘shotgun wedding’ between Lloyds Bank and the former HBOS group. However, the group’s heritage goes all the way back to 1695, when the Bank of Scotland (my employer from 1999/2002) was founded. For this price, I could also acquire 13 leading UK financial brands, including Lloyds Bank, Halifax, Bank of Scotland, Birmingham Midshires, Scottish Widows, and MBNA. What’s more, with the Lloyds share price’s recent declines, the stock looks pretty cheap to me. LLOY trades on a price-to-earnings ratio of 6.5 and an earnings yield of 15.5%. The dividend — restrained by the regulator but recently resumed — offers a cash yield of 2.9% a year. That’s almost a percentage point lower than the FTSE 100’s dividend yield, but could well rise over time. So, yes, with cheap funding, I would certainly buy all of Lloyds to run for my personal enrichment. Thus, this means that I’d also be happy to buy LLOY and own a small part of the bank. I might well regret this buying decision if the global economy cools, more lockdowns are imposed, or interest rates fall as these are all major risks for Lloyds. But I’d happily join the Lloyds shareholder register today! The post The Lloyds share price drops 15% since June. Time to buy? appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading Why are Lloyds shares losing momentum? Is the Lloyds share price destined for disaster? 3 of the best FTSE 100 index shares to buy right now What’s next for the Lloyds share price? Is the Lloyds share price too cheap to ignore? Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
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  9. Why I prefer the Lloyds dividend to the Rolls-Royce share price (04/09/2021 - The Motley Fool UK)
    When searching for bargains in the FTSE 100, a number of blue-chip names pop out. While the recent Rolls-Royce (LSE: RR) share price rise means that the engineer is no longer a penny stock, that’s not true for bank Lloyds (LSE: LLOY). Right now I would rather have Lloyds in my portfolio for its dividend than Rolls-Royce for any potential capital gain. Here’s why. Dividends as passive income Dividends can make an excellent source of passive income. While I don’t always go for income stocks, dividend potential is a consideration for me a lot of the time. Dividends are never guaranteed: neither Lloyds nor Rolls-Royce made payouts last year, for example. But while in the case of Lloyds that was due to a regulatory constraint, for Rolls-Royce it was because the company needed to shore up liquidity. Fast forward to today and Lloyds has restored its dividend. So far this year, its interim dividend of 0.67p might not sound like anything to write home about. But given its penny share status, that dividend alone equates to an annual yield of 1.5%. If the bank returns to its prior policy of the interim dividend representing around one third of the total annual payout, that suggests a forward yield of 4.5%. By contrast, Rolls-Royce continues to pay no dividend. Indeed, the conditions on a loan it has drawn mean it cannot pay any dividends until 2023 at the earliest. Even then, dividends aren’t assured. That is true for Lloyds too – no dividend is ever guaranteed. An increase in bad loans could hurt Lloyds’ profit and make it cut its dividend again, for example. But currently from a dividend perspective, I would feel much happier having Lloyds in my portfolio than Rolls-Royce. The Rolls-Royce share price as a possible source of gain However, dividends aren’t the only game in town. It’s also possible for an investor like myself to benefit from share price appreciation. The Lloyds share price has increased 62% over the past year and Rolls-Royce has gained 50%. I’d have welcomed either result with open arms. I think there is further possible upside for both shares. If Lloyds can continue to record bumper profits – its statutory profit in the first half was £3.9bn – I think it could boost the bank’s share price. Meanwhile, at Rolls-Royce, increasing demand for air travel could boost both revenues and profits. Additionally, the company’s anticipated return to free cash flow positivity in the current half-year period could boost the Rolls-Royce share price. That’s because it would help to allay liquidity concerns. However, if aviation demand stalls or the cash flow target isn’t met, there is a risk the Rolls-Royce share price could fall. But Lloyds faces risks too. For example, its foray into becoming a landlord could hurt its profitability. My next move I do see potential for appreciation in the Rolls-Royce share price. But for now I plan to hold my Lloyds shares without adding Rolls-Royce to my portfolio. That’s for two reasons. First, the dividend prospects for Lloyds in the next several years seem much better. Secondly, Lloyds has had a strongly performing business but Rolls-Royce remains a turnaround story. Either could make a misstep, but there’s often less room for error in a turnaround situation. The post Why I prefer the Lloyds dividend to the Rolls-Royce share price appeared first on The Motley Fool UK. Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices Make no mistake… inflation is coming. Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing. Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question. That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… …because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not! Best of all, we’re giving this report away completely FREE today! Simply click here, enter your email address, and we’ll send it to you right away. More reading Is the Rolls-Royce share price a bargain at 115p? The Lloyds share price: time to buy the dip? Where will the Lloyds share price move in the future? The Lloyds share price drops since June. Is it a bargain now? How long could it be until the Lloyds share price gains serious momentum? Christopher Ruane owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  10. The Lloyds share price still looks cheap to me! I’d buy it today in an ISA (26/03/2021 - The Motley Fool UK)
    Trading at just over 40p, the Lloyds Banking Group (LSE: LLOY) share price still looks like a bargain to me. I say ‘still’ because the FTSE 100 bank has been on a rip-roaring run lately, rising 70% in the last six months. Despite this, I continue to see a great buying opportunity here. The Lloyds share price has taken such a beating over the last decade that it remains inexpensive, despite its rapid growth surge in recent months. That’s why I’d buy it in a Stocks and Shares ISA today. Measured over five years, the stock is down 40%. It actually trades a third lower than 10 years ago, when the Lloyds share price topped 60p. The trauma of the financial crisis has cast a long shadow, and the pandemic has made matters worse. Top FTSE 100 recovery stock Lately, investors have been looking to the post-Covid future, with growing optimism. The big banks were hit hard by last year’s lockdowns, as economic activity stalled. The financial sector was one of the the FTSE 100′s worst performers, along with oil stocks. I think that makes it a tempting way to play the recovery, once vaccines do their work. The big banks have made massive provisions for debt impairments. Thanks to government support, such as furlough and other measures including payment holidays, customers may not be as hard-hit as the banks originally anticipated. If the economy bounces back strongly, the Lloyds balance sheet and share price could look a lot healthier. Lloyds trades at a bargain 10.2 times forward earnings. Its price-to-book value of 0.6 is also tempting, well below the 1.0 generally considered fair value. The Lloyds share price looks good value I think this is a good time to buy stocks that will pay attractive dividends. Lloyds cut shareholder payouts last year, but restored them in February. Brokers now forecast a yield of 3.9%. Better still, that’s covered 2.5 times by earnings. In the longer run, I’d anticipate income of 5-6% a year. Many analysts have warned that inflation could sweep the world, once people are released from lockdowns and start spending their pent-up savings. Bond yields are rising in anticipation, and that’s good news for the banks. It should help them increase their net interest margins, the difference between what they pay depositors and charge borrowers. Again, this would spell good news for the Lloyds share price. There are risks, inevitably. First, my rosy economic scenario may not come to pass, due to vaccine problems or mutant Covid strains. After years of retrenchment, Lloyds is now a shrunken entity focused on the UK, leaving it exposed to domestic troubles. As the UK’s biggest mortgage lender, it could suffer if the current housing boom goes into reverse. The share price has disappointed for years. That wouldn’t stop me from adding Lloyds to my ISA portfolio at today’s low share price. It remains a top income stock, and I’d aim to hold for the long term. To retirement and beyond. I would also check out this. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Lloyds share price is rising: should I buy now? Why I’d ignore the Lloyds share price and buy this cheap UK share right now Will the Lloyds share price recover in 2021? The Lloyds share price: what have I learned from it? Lloyds share price forecast: is 50p obtainable this year? Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price still looks cheap to me! I’d buy it today in an ISA appeared first on The Motley Fool UK.
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  11. I’m avoiding the Lloyds share price. I prefer this 5% dividend yield stock instead! (15/02/2021 - The Motley Fool UK)
    Lloyds Banking Group (LSE:LLOY) has had a year to forget. Lloyds shares are on my avoid list for the foreseeable future right now. Instead, I am looking at other options that could make me a passive income.  Can the Lloyds share price recover? LLOY’s performance on the FTSE 100 over the past 12 months has been poor. Across the 100 incumbents, the Lloyds share price is close to the bottom based on performance over the past 12 months. LLOY has lost over 30% of its share price value in the past 12 months. Since the first day of trading in January, it has lost over 35%. Shares plummeted to a low of 23p per share back in September. As I write this, the Lloyds share price is up nearly 9% in February alone. This bounce could be attributed to the Covid-19 vaccine rollout. There is an argument for LLOY to be a great contrarian investment. After all, LLOY still boasts over 30m customers, which means people still trust them with their money. In addition to that, it possesses a fairly decent balance sheet which should see it through current murky waters. If and when an economic recovery does occur, LLOY is in a position to benefit. But given the economic uncertainty we’re facing, I do not see the Lloyds share price as a contrarian investment and will avoid it for now. Passive income opportunity I often look for dividend stocks with a healthy yield that can make me a passive income. A stock I really like right now is PRS REIT (LSE:PRSR). A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. PRSR is “the UK’s first quoted real estate investment trust to focus on high-quality, new build family homes for the private rental market”. Unlike the Lloyds share price, the PRSR share price represents an opportunity to me right now. It is currently at a yearly high of 88p per share. Since a market crash low of 60p per share, it has recovered over 45% of its share price value. PRSR can capitalise on the demand of rental properties currently outweighing supply, which is driving tenant costs higher. Zoopla recently reported rents increased over 2% in the last three months of 2020. City analysts predict a further annual dividend growth at PRSR meaning it carries a juicy dividend yield of over 5% to the fiscal year ends of June 2021 and 2022. This could be a great addition to my investment portfolio for its passive income. Risk and reward I have invested in buy-to-let in the past which has cost me a lot of money up front and additional running costs too. I have learnt from that and now prefer investing in stock such as PRSR. There are risks involved of course. If the economy begins to recover, more people will look to move away from renting and buy their own homes. In addition to that, the return of lower deposit mortgages could have a negative effect too. Right now, I believe PRSR offers a juicy yield and is a tempting stock to invest in. I would avoid the Lloyds share price and monitor events. Here is another dividend stock I really like to make me a passive income. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Should I buy Lloyds Banking Group shares now? Lloyds share price: should I buy in February 2021? The Lloyds share price is falling again! Should I take advantage and buy? The Lloyds share price: 2 reasons I’m keen right now, but 2 big risks I’d note UK stock investing: 2 of the best dividend shares to buy right now Jabran Khan has no position in any shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post I’m avoiding the Lloyds share price. I prefer this 5% dividend yield stock instead! appeared first on The Motley Fool UK.
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  12. Lloyds Bank brings dividends back. Is it a good share for me to buy now? (24/02/2021 - The Motley Fool UK)
    As an investor, I had been waiting  for Lloyds Bank (LSE: LLOY) to answer one question. It did so today, when it released its full-year results. My question was — will it bring dividends back? The LLOY share had a healthy dividend yield pre-pandemic. This meant that it was on my income investing watchlist since it had been given a regulatory go ahead to start paying them again.  Now that the question is answered, there is another one that follows. Is it a good share to buy now? I think the answer is both yes and no. Here is why.  Dividends are back, but are they really? First, let us consider the dividends. Lloyds has decided on a dividend amount of 0.57p per share. At a share price of 39p as I write, this translates into a dividend yield of around 1.5%. This looks underwhelming. But there are two aspects to consider here.  One, the dividend amount was not entirely at the discretion of Lloyds Bank. It was capped by limits set by the Bank of England’s Prudential Regulation Authority (PRA). These limits are dependent on the levels of risk-weighted assets and past profits. LLOY has actually paid the maximum amount possible under these limits.  Two, its dividends are not much different from that of another FTSE 100 bank that just reinstated dividends, Natwest, at 1.6%. It is also much higher than that for Barclays, which has a dividend yield of 0.6%. As this “framework of temporary guardrails” as the PRA calls it, is eased, I reckon that banks like LLOY would like to increase their dividend amounts. I say this because the LLOY share price dropped sharply after it paused dividends last year, indicating investor sensitivity to the passive income the share generates.  When the regulatory easing happens, however, remains to be seen.  Is Lloyds Bank a growth share now? Until such time, I think it would be a good idea to buy the Lloyds Bank share only if it can be a good growth stock. I am not sure that it is, though, for the foreseeable future.  The Lloyds Bank share price rose sharply as the stock market rally started in November. While this is indeed a positive for shareholders, whose investment in LLOY had more than halved from the start of 2020 up to November, the earnings ratio for the bank is now close to 33 times.  I think that this is a pricey ratio for a share that still faces a lot of uncertainties. It also competes for investments against better performing FTSE 100 shares. We can see the end of the pandemic by the middle of the year, but we still need to brace for an economic slowdown. Bad debts could be high and interest rates are already quite low. Also, financial services is still in limbo post-Brexit.  The upshot I’d like to wait for more clarity on the overall economic scenario and any changes to both the PRA’s dividend policy and LLOY’s own before taking a decision.  5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Shares to buy now: why I’d consider Lloyds Banking Group alongside this FTSE 100 stock Lloyds’ share price could make it one of the best dividend shares to buy now Lloyds share price: will it rise if the dividend makes a comeback? If I’d invested £1,000 into Lloyds shares a year ago, here’s how much it’d be worth today The Lloyds share price is climbing in February. Should I top up my holding? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds Bank brings dividends back. Is it a good share for me to buy now? appeared first on The Motley Fool UK.
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  13. Lloyds Bank share price: back to pre-crash levels of 40p. Should I buy it now? (06/03/2021 - The Motley Fool UK)
    Earlier this week, the FTSE 100 banking biggie, Lloyds Bank (LSE: LLOY) finally put the market crash behind it. The Lloyds Bank share price breached 40p, going back up to pre-crash levels. UK Budget 2021 lifts banks’ shares The possible reason for the latest share price rise is not hard to find. The UK Budget 2021 stated it will review the 8% bank surcharge. The surcharge is an additional tax on profits over and above the corporation tax.  This could add to banks’ competitiveness and also support London in maintaining its position as a global financial capital. There is no Brexit deal on financial services so far.  Financial services is important for the UK, contributing to about 7% of the economy. According to the UK Parliament, London alone generates half of this.  It is no coincidence then that the Lloyds Bank share price first spiked above the 40p level on budget day.  It is also no coincidence that other FTSE 100 banking entities have seen a run-up since. As I write, Standard Chartered is the biggest gainer, with a 5% share price jump. HSBC, Natwest, and Barclays have also shown over 2.5% increases in the day.  Dividends resumed too This is the second piece of policy good news in the last three months to give a fillip to UK’s banks. In December, the Bank of England’s Prudential Regulation Authority (PRA) eased rules for dividend payment.  UK’s banks, including Lloyds Bank, responded swiftly by returning to dividend payments. The extent of those dividend payments, however, is still directed by the PRA. As a result, the dividend yield is still fairly low. LLOY’s dividend yield, for instance, is a muted 1.4%. Rising dividend yields? But this may change too, bringing in a third piece of good news. The PRA has said that the restrictions on the extent of dividend payouts are temporary.  This means that as and when they are unrestricted, banks’ dividends and dividend yields can inch closer back to where they were pre-pandemic and pre-stock market crash.  What is next for the Lloyds Bank share price A high dividend yield has been one of Lloyd Bank’s attractive features to investors in the past. A potential increase in dividends can help the Lloyds Bank share price to rise more. As can any follow-up developments on the bank surcharge.  Even otherwise, as the lockdown ends and the economy is back on its feet, things can get much better for banks. The housing market is booming in any case.  Late last year, there were reports of banks increasing interest rates in response to demand for housing loans. The UK Budget 2021 also continues its support for property markets, and house builders have reported strong order books for 2021. This bodes well LLOY, the UK’s largest mortgage lender.  What can go wrong for LLOY But interest rates are low and likely to stay so, meaning that LLOY’s bottomline can continue to be impacted. Further, the extent of bad loans that banks suffer because of the pandemic will only be known over time.  I am watching the Lloyds Bank share price though, as the environment improves around it slowly.  There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Why I’d ignore the Lloyds share price and buy this UK share from the FTSE 100 Should I buy Lloyds Bank stock for my ISA or other cheap UK shares? The Lloyds share price: here’s what I expect next The Lloyds share price: what do the latest results mean? Stock market recovery: 3 UK shares to buy today Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, HSBC Holdings, Lloyds Banking Group, and Standard Chartered. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds Bank share price: back to pre-crash levels of 40p. Should I buy it now? appeared first on The Motley Fool UK.
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  14. The Lloyds share price drops since June. Is it a bargain now? (02/09/2021 - The Motley Fool UK)
    On Wednesday, the Lloyds share price closed at 44.02p. Lloyds has 71bn shares outstanding, so the bank is valued at £31.2bn, making it a FTSE 100 stalwart. But the stock has weakened since June. Is it a bargain or a value trap today? The Lloyds share price roller-coaster Since early 2020, the Lloyds share price has been a roller-coaster ride. During the 2020 Covid-19 crisis, the stock slumped to fresh lows. On 22 September 2020, it crashed to an intra-day low of 23.58p. Just two days later, I said: “I see a lifetime of value in Lloyds” at 24.58p. And, as mass-vaccination programmes got underway in 2021, the shares duly doubled. On 1 June, the Lloyds share price hit 50.56p, a 52-week high. However, since June, the stock has been in decline. At today’s price, it’s down 12.9% in three months. Then again, the shares are up over six months (+13.2%) and have soared over one year (+62.9%). But the stock has lost more than a quarter (-27.8%) of its value over five years. Also, the price is down 4.8% over one month (but remember that this is during the market’s usual summer lull). Lloyds is in good shape Looking at the bank’s half-year results, things look pretty rosy. Total income in H1 2021 was £19.6bn, almost treble the £6.9bn of H1 2020. Likewise, the bank went from a pre-tax loss of £0.6bn in H1 2020 to a profit of £3.9bn this time. This propelled earnings per share — a key driver of share value — from a loss of 0.3p to a healthy profit of 5.1p. So, everything’s great, right? Not exactly, because Lloyds’ latest results were flattered by large loan write-backs going straight into its bottom line. I’m a sucker for a bargain and am always on the lookout for quality shares trading at lower prices. But often there are reasons for share-price declines, such as reduced future business prospects. For example, this could be the UK economy slowing down, or more coronavirus variants hitting consumer spending. But let’s review the firm’s value characteristics. At the current Lloyds share price, the stock trades on a price-to-earnings ratio of 6.7 and an earnings yield of 14.9%. That’s about half as expensive as the wider FTSE 100 index. Lloyds offers a dividend yield of 2.8% a year, almost a percentage point lower than the Footsie’s forecast yield of 3.7% a year. But the dividend has scope to return to its former heights. Now let’s check out Lloyds in terms of three other metrics. First, its net asset value of 73p a share is well above its stock price. Second, the bank’s return on tangible equity (ROTE) soared to 24.4% in Q2, versus a mere 5.9% in Q4 last year. Third, Lloyds’ common equity tier 1 (CET1) ratio — a key measure of its financial strength — increased to 16.7% at the end of June, well above its regulatory minimum of 11%. This implies that the bank has billions in spare capital. Time to sum up. For many years, Lloyds was regarded as a classic ‘jam tomorrow’ value stock. For me, the shares have fallen behind the bank’s underlying business prospects. Today, I see Lloyds as a geared play on any future UK economic recovery. I don’t own Lloyds stock, but I’d happily buy at current levels. That said, if we don’t get coronavirus under control, I fear for British banks! The post The Lloyds share price drops since June. Is it a bargain now? appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading How long could it be until the Lloyds share price gains serious momentum? Will the Lloyds share price finally start to move in September? How Lloyds Bank stock can confound value investors The best FTSE 100 dividend shares to buy for 2022 Can the Lloyds share price return to pre-pandemic levels? Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  15. The Lloyds share price is up again. Should I buy some more? (29/04/2021 - The Motley Fool UK)
    Lloyds Banking Group (LSE: LLOY) had a good day Wednesday, after a first-quarter update. The Lloyds share price ended the day 3.5% ahead. And that kind of bullish feeling has been rare for Lloyds shareholders in recent years. I still have a way to go before I get my loss down to 50% since I bought my Lloyds shares, mind. Lloyds shares are up 36% over the past 12 months, more than twice the gain of the FTSE 100 over the same period. But that does exclude the first couple of months of the stock market crash. If we look back to just before Covid-19 hit the markets, The Lloyds share price is still down 31%. What did the Q1 update hold? My Motley Fool colleague Paul Summers covered the key facts and figures on the day. Here, I want to examine a few key points that I see as particularly important as an investor, both positive and negative. Firstly, it’s good to see opening quarter pre-tax profit reaching £1.9bn. But I won’t get too excited by the size of the jump over the same period last year, given what was happening back then. To me, it’s more at the ‘I didn’t break my leg again today’ level of good news. Saying that, it did beat market expectations, and Lloyds achieving that hasn’t been too common an occurrence. If Lloyds can maintain this kind of profit, we could see a return to 2017 and 2018 strength. Not in the clear yet But I need a lot more than a single positive quarter to convince me that the Lloyds share price is set enter a period of strength. I’m not going to forget, for example, that profit took a dip in 2019, before the pandemic took hold. Also, the bumper quarter was helped by a big improvement in Lloyds’ bad debt provisions. With the economic outlook brightening, the bank enjoyed a net impairment credit of £323m. An assumption that fewer people are going to fail to repay their debts is down to a change in short-term external conditions. It doesn’t really speak of any long-term improvements in the bank itself. Still, I invested in Lloyds for the dividends, and I’m seeing encouraging developments on that front. The bank is still held back by PRA restrictions, and I can see Lloyds share price weakness continuing while they’re in force. But the bank said it’s “accruing dividends with intention to resume progressive and sustainable ordinary dividend policy.” Lloyds share price finally recovering? There were no dividend numbers, which was a little disappointing. And it raises the risk that Lloyds related ambitions might not match investors’ hopes. Forecasts suggest 1.68p per share for the current year, for a 3.7% yield on the current Lloyds shares price. There’s better out there, but that’s not bad. And, hopefully, it’ll be a precursor for sustained progressive dividends. So what’s my overall feel on the Lloyds share price now? Well, once again, I’m looking at a hammered banking sector on the verge of what I’m hoping is, finally, a sustainable recovery. I’m not selling now, and I’d probably buy if I wasn’t already a shareholder. But I don’t think we’re out of the woods yet. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds share price is headed back to 50p. Would I buy it? The Lloyds share price is flying! Should I buy LLOY today? I’d ignore the Lloyds share price and buy other UK shares in an ISA Lloyds share price vs HSBC share price: which bank stock would I buy? Is the Lloyds share price undervalued? Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is up again. Should I buy some more? appeared first on The Motley Fool UK.
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  16. The Lloyds share price is headed back to 50p. Would I buy it? (28/04/2021 - The Motley Fool UK)
    Adding to the buoyancy of this earnings season, Lloyds Bank (LSE: LLOY) too posted a healthy first quarter update. Investors are clearly happy. The Lloyds share price is up by 4% this morning, making it the biggest FTSE 100 gainer in today’s trading so far.  The Lloyds share price stands at 45.4p as I write, the highest in over a year. If the momentum built up by its latest numbers continues, I reckon it is only a matter of time before it goes back up to its pre-market crash levels of 50p.  Since January 2021 alone, the Lloyds share price has risen by over 10p, which shows that it is possible in a matter of months, if not less.  Why the Lloyds share price can keep rising The key, however, is that share price momentum should continue. I think there are three reasons it can.  #1. Profits rise: Lloyds Bank’s net profits came in at £1.4bn this quarter, which is a 191% increase from the same quarter last year. This is because of betterment in its bad debt provisions. It actually has a £323m impairment credit this quarter, compared to a £1.4bn provision in the first quarter of 2020.  This is disappointing since the improvement in Lloyds Bank’s health is not because of improved business, but because it think it is now more likely to be repaid loans than before. But I think even just this fact is a positive, considering the economic slump recently seen in the UK and the fact that we are still not past the pandemic.  #2. Positive outlook: The bank also sounds quite bullish in its outlook. It expects lower operating costs, which is positive for future earnings. It also expects better asset quality, which is in line with its optimistic stance on bad debts now.  #3. Supportive economy: Lloyds Bank’s bullish outlook is based on a robust economic outlook. In its own projections, it expects the UK economy to grow by 5% in 2021 and 2022 as the base case, which is encouraging. This should help in a pick up in loans, an improvement in interest income, and a better bottom line, without the help of impairment charges. The downside to the FTSE 100 stock However, I think downsides to the Lloyds Bank share price need to be considered too. Even though I think impairments are a valid reason for a profits boost, I looked at the bank’s performance before these were factored in. To do this, the trading surplus was considered, which is the net income less costs. The number comes in at £1.7bn, which is actually 12% less than during the year before. It is still 21% higher than last quarter, to be fair. But overall, the earnings story looks less impressive by this measure.  Also, the bank says nothing material on dividends, a big reason the Lloyds Bank share was attractive earlier.  My verdict I would wait for another quarter to really know how things look for the share and indeed, the UK economy.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Lloyds share price is flying! Should I buy LLOY today? I’d ignore the Lloyds share price and buy other UK shares in an ISA Lloyds share price vs HSBC share price: which bank stock would I buy? Is the Lloyds share price undervalued? 2 UK penny stocks I’d consider picking now Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is headed back to 50p. Would I buy it? appeared first on The Motley Fool UK.
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  17. The Lloyds share price leapt 7% last week. But it could go much higher (04/05/2021 - The Motley Fool UK)
    Last week was a good one for long-suffering shareholders of Lloyds Banking Group (LSE: LLOY). After releasing decent results, the Black Horse bank’s shares jumped. Indeed, the Lloyds share price ended the week up almost 7%. But I think this could be the start of a sustained recovery for Lloyds shares. The Lloyds share price leaps 6.6% On Friday, 23 April, the Lloyds share price closed at 42.63p. A week later, it closed at 45.44p. That’s a rise of 2.81p (6.6%) in a week — one of the stock’s best performances in 2021. In fact, Lloyds was the third-best performer in the FTSE 100 index last week (narrowly beaten by two other bank stocks). Also, the shares have been on a bit of a winning streak in 2020/21. Here are their gains over four recent timescales: 1M +6.8% 3M +35.8% 6M +62.1% 1Y +40.9% Lloyds has been a long-term loser Hey, it’s all been sunshine and roses for Lloyds shareholders, right? Wrong! Here’s how the Lloyds share price has performed over the longer term: 2Y -27.4% 3Y -29.7% 5Y -33.3% As you can see, the Lloyds share price has been a short-term cherry, but a long-term lemon. Indeed, it’s down exactly a third over the past half-decade. Over the same period, the FTSE 100 index is up almost a seventh (13.8%). That’s a massive underperformance by LLOY. As one of the UK’s leading lenders, Lloyds was battered by the Covid-19 crisis. Last year, the bank set aside over £4.2bn in loan-loss reserves. This contributed heavily to after-tax profit collapsing by more than half . It was down 54% to £1.4bn in 2020, from over £3bn in 2019. Still, the Lloyds share price has come a long way from the low of 23.59p it hit on 22 September 2020. Still, any brave investors buying at this time would have almost doubled their money today. Can the bank bounce back in 2021/22? Happily, the bank unveiled an improved set of figures last Wednesday, when it released its first-quarter results. One bright spot was credit impairments (reserves against bad debts) at a mere £323m in Q1/21. This helped after-tax profit to reach £1.4bn for January to March. Remarkably, that is the same as in the whole of 2020. This explains the leap in the Lloyds share price last Wednesday and the impressive weekly rise. To really thrive once more, Lloyds really needs three things. First, it needs consumers to start spending at pre-Covid-19 levels, boosting the UK economy. Second, it needs individuals and businesses to start borrowing again, instead of stashing their cash on deposit. Third, the bank needs to arrest the decline in its NIM (net interest margin; the spread it makes between savings and lending rates). If all three were to come in, then banks would hit the jackpot and I would expect the Lloyds share price to surge from here. But what if economists and central bankers are wrong and the world doesn’t undergo a multi-year economic boom? If UK growth stutters, then unemployment could rise and bad debts creep up. Similarly, any further Bank of England rate cuts would hit Lloyds’ bottom line. Also, new Covid-19 variants could hinder the UK’s long-awaited return to normality. But I’m optimistic that mass vaccinations will eventually get us to a better place. Thus, I think the Lloyds share price still has a long way to go and I’d be happy to buy at current levels. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Forget the Lloyds share price. These FTSE 100 shares can make me a passive income The Lloyds share price is rising: here’s what I’d like to do As the Lloyds share price rises, I’d still consider buying The Lloyds share price is up again. Should I buy some more? The Lloyds share price is headed back to 50p. Would I buy it? Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price leapt 7% last week. But it could go much higher appeared first on The Motley Fool UK.
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  18. As the Lloyds share price rises, I’d still consider buying (30/04/2021 - The Motley Fool UK)
    Lloyds (LSE: LLOY) shareholders have had a good week. The Lloyds share price moved up a few pence after a first-quarter trading update on Wednesday was well received by the City. It’s up 41% over the past year. Here I’ll explain why the statement caused excitement and share what I plan to do next about the Lloyds share price. Growth drivers for the Lloyds share price There were several reasons the results went down well. Let’s focus on three. First, the company unwound some of its bad loan provisions from last year. This is money the bank had put aside in anticipation of possible borrower defaults. If it isn’t used, it can be unwound. That’s like taking cash out of my wallet and putting it on the mantelpiece to pay a bill – only to discover that the bill is less than expected. I can put some of the cash back in my wallet. Lloyds released £336m of such provisions. In the equivalent quarter last year, at the onset of the pandemic, it took a hit of £1.3bn making such provisions. I see this as good news for the share price as it suggests a more benign trading environment than the bank previously feared. Profit jump A second potential growth driver for the Lloyds share price from the statement was quarterly profit. That stood at close to £1.8bn before tax. That’s more-than-quadrupled from the same period last year, when profit stood at £400m. It largely reflects the bad loan provision impact I discussed above. However, I see the headline profit as a possible growth driver for the shares. It reminds investors that while Lloyds may be the only penny share in the FTSE 100, it is able to generate a profit on such a massive scale in a single quarter. I think that reiterates a fundamental strength of the business. Its focused model of mainstream business and retail banking centred on the UK has a proven ability to turn profits. Dividend prospects A third positive aspect of the trading statement in my opinion was the company’s comment on dividends. Lloyds said that it is “accruing dividends with intention to resume [a] progressive and sustainable ordinary dividend policy”. In other words, it has continued to save money while its dividend level is constrained by regulatory requirements. There is no guarantee, it could end up paying these excess funds out as a special dividend, but the news was still good on a “progressive” dividend payment. I like blue-chip shares with attractive dividend yields. Lloyds share price risks However, there are risks, even if the Lloyds share price seems attractive. The dividends may not end up being progressive and there is no guarantee of future dividends at all. As we saw in the pandemic, the bank could be prohibited from paying dividends by its regulators. The company’s fortunes are also closely tied to those of the UK economy. That could be a risk in the event of any economic downturn. My Lloyds action plan The trading statement highlights some of the reasons I think the company has a stronger future ahead and why I find the current Lloyds share price attractive. Plus, I still think its shares have further to rise. More good news later in the year could drive the shares higher. I’m currently considering buying more Lloyds shares for my portfolio now. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds share price is up again. Should I buy some more? The Lloyds share price is headed back to 50p. Would I buy it? The Lloyds share price is flying! Should I buy LLOY today? I’d ignore the Lloyds share price and buy other UK shares in an ISA Lloyds share price vs HSBC share price: which bank stock would I buy? christopherruane owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post As the Lloyds share price rises, I’d still consider buying appeared first on The Motley Fool UK.
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  19. Where will the Lloyds share price go in June? (31/05/2021 - The Motley Fool UK)
    As a Lloyds Banking Group (LSE: LLOY) shareholder, it’s great to finally be able to say the shares have had a good year. Well, so far at least. The rise has carried on through May, pushing the Lloyds share price up 35% in 2021. Will the momentum keep on driving the shares up through June? Well, I’m not seriously going to try to predict where Lloyds will go next month. That’s for two reasons. One is that anything can happen in such a short timescale, and one-month movements are hard to distinguish from random. The other reason is that I’m lousy at the prediction game anyway. But do I see value in taking stock of what’s happened and thinking about the things that could affect the Lloyds share price through June and beyond. Lloyds share price weakness Lloyds shares are still down around 12% since mid-February 2020, just before the pandemic hit and the stock market crashed. Prior to that, Brexit uncertainty was giving Lloyds shareholders a hard time. We still face that, but are there any pandemic uncertainties left? In its Q1 update for March, Lloyds reported a £459m impairment release, due to the improving economic outlook. It still had a net impairment credit of £323m in the quarter, mind. But that means the impact of the pandemic crash on the bank’s bad debt situation hasn’t turned out as badly as feared. And further improvements over the rest of the year could see Lloyds freeing up more of the cash it’s set aside. That could give the Lloyds share price an extra lift, though boosting dividend prospects. The bank has already paid a 0.57p dividend, though that’s hardly the amount retirement dreams are built on. But it’s the maximum that the PRA will allow right now. So we’ll have to wait and see what dividend levels Lloyds will pay when free market conditions return.  The resumption of dividends At Q1 time, Lloyds said it was “accruing dividends with intention to resume progressive and sustainable ordinary dividend policy.” Once that’s back in place, I think we really can start to see things as back to normal. The next update on Lloyds’ future dividend policy should come with July’s first-half results. But without anything scheduled for June, I think its share price could drift sideways for a while. Still, June could be a very important month for Covid-19 progress. And any economic news could have an effect. Anyway, whatever happens to the Lloyds share price in June and over the next few months, it’s not too important to me. And I reckon there’s probably as much chance of short-term losses as gains. But I do think the positive progress the bank’s made in the first quarter could well set it up for a good year. And then we come back to the risks posed by Brexit. I’m holding, and I might even top up. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading The Lloyds share price is still rising: here’s why I’d buy now I was right about the Lloyds share price. Here’s my outlook now The Lloyds share price is soaring. What should I do now? The Lloyds share price has doubled since September. Can it keep going? 5 reasons I think Lloyds share price can touch 60p Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Where will the Lloyds share price go in June? appeared first on The Motley Fool UK.
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  20. The Lloyds share price is flying! Should I buy LLOY today? (28/04/2021 - The Motley Fool UK)
    Exactly one year ago, I suggested the Lloyds (LSE: LLOY) share price could double investors’ money if a significant second wave of the coronavirus was avoided. We all know how that turned out. Maybe this suggestion wasn’t too fanciful. After all, Lloyds’ valuation is a lot higher now than it was back then. It’s climbed another 4% in value today, following an encouraging Q1 trading update. Why is the Lloyds share price flying? Thanks to an improving outlook on the UK economy, pre-tax profit for the first three months of 2021 came in at £1.9bn. This is clearly a vast improvement on the paltry £74m achieved over the same period in 2020. The latest number also beat market expectations, suggesting the Covid-19 hangover won’t be quite as bad as originally feared. Loans and advances at Lloyds increased slightly to £443.5bn in the three months to the end of March. As a sign of the UK’s booming housing market, this included £6bn of growth for its mortgage book. On the other side, customer deposits also moved £11.7bn higher to £462.4bn, giving a loan-to-deposit ratio of 96%.  In his final statement before leaving the company for Credit Suisse, CEO António Horta-Osório said the bank had made a “strong start” to 2021. I find it hard to disagree.  Can this continue? Today’s numbers certainly make me more bullish on the Lloyds share price than I once was. Arguably, the most important snippet from today’s statement was the bank’s decision to raise its full-year guidance. The FTSE 100 member now expects net interest margin –– the difference between the interest income it makes and the interest paid out to lenders — will now be in excess of 2.45%. Operating costs are also expected to come down by roughly £7.5bn. This should all be good news for those holding the shares for income. Indeed, Lloyds reiterated today that it intended to resume a “progressive and sustainable ordinary dividend policy.” Analysts are currently penciling in a 1.68p per share total return for FY2021. With the Lloyds share price at 45p, as I type, that gives a yield of 3.7%. Yes, more can be made in other FTSE 100 stocks but that’s still a decent payout.  Cautiously optimistic As an investor primarily focused on growth, I’ve never been a fan of bank shares. The poor share price returns over recent years hardly inspire confidence. By contrast to the traditional view of banks being safe investments, events like the Great Financial Crash and PPE scandal also show how risky investing in this space can actually be.   Those risks remain. While the UK’s vaccination programme is going swimmingly, only a fool (rather than a Foolish investor) would assume that there won’t be setbacks ahead. As Lloyds’ departing leader remarked, “the outlook remains uncertain.” A third wave certainly can’t be ruled out. While currently buoyant, the housing market could also lose a bit of steam once the Stamp Duty holiday given to buyers ends in June.  Nonetheless, today’s numbers (and subsequent market reaction) lead me to suspect that recent momentum in the Lloyds share price will continue. Trading on a little under 9 times forecast earnings, it certainly looks cheap. This is supported by a low price-to-book value of just 0.63 (under 1.0 generally implies value).  If I were to buy bank shares today, would I buy LLOY? I think I would. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading I’d ignore the Lloyds share price and buy other UK shares in an ISA Lloyds share price vs HSBC share price: which bank stock would I buy? Is the Lloyds share price undervalued? 2 UK penny stocks I’d consider picking now FTSE 100 stock Lloyds’ share price slips. Would I invest? Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is flying! Should I buy LLOY today? appeared first on The Motley Fool UK.
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  21. The Lloyds Bank share price has touched 50p. Here’s what I’d do now (02/06/2021 - The Motley Fool UK)
    A little over a month ago, I was confident that Lloyds Bank (LSE: LLOY) was on its way back up. In today’s trading, the Lloyds Bank share price reached 50p, the level I had predicted.  Why I expected the Lloyds Bank share price to rise My argument was based on the momentum recently seen in its share price. A positive earnings report, improving economy, and its own bullishness were the reasons I expected to see these gains.  Specifically, I had said that this was possible in a matter of months, if not less. It has taken just a month and a few days. In fact, it was so increasingly evident to me that it would cross 50p soon, that by mid-May I had said that it could now head to the 60p mark.  The next important question These short-term price targets are helpful to me as an investor to understand the share better. At the same time, we at the Motley Fool are interested in a long-term answer.  The question to which is: Can the Lloyds share price continue to generate capital gains for me over time? I think it is important to ask this question right now more than at any other time I have tracked the stock. This is because until last year, Lloyds paid a hefty dividend. This meant it was a somewhat attractive stock despite its weak share price trend.  But last year, the Bank of England asked banks to first stop paying dividends and then allowed them only cautiously. As a result, the Lloyds dividend yield is low. So if its share price does not continue to rise, I just do not see any reason to buy the share.  There is much hope I am hopeful though. The regulator hopes that the “guardrails” as they are called, will be there for only some time. Lloyds’ and other banks’ latest healthy results only encourage this idea further. As do the BoE’s optimistic projections for economic growth. This means that not only can it start paying dividends, its share price can continue rising too.  But also a catch But here is a catch. House prices are still elevated, but BoE’s numbers from earlier today show a sharp fall in home loans in April compared to the month before.  Lloyds is the country’s biggest lender in the category, so I would watch this trend going forward. This is important because the stamp duty holiday gave a big push to the housing market in an otherwise poor year. And it will start getting withdrawn from the end of June.  My takeaway for the Lloyds Bank share price I think the next update from Lloyds is an important one. It will give a real insight into the bank’s performance after the economic wheels start turning again. It might also give guidance to help in making an assessment of its future.  As I said in my last article on the bank, I will wait for another update before making a call on the Lloyds share price.  “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Where will the Lloyds share price go in June? The Lloyds share price is still rising: here’s why I’d buy now I was right about the Lloyds share price. Here’s my outlook now The Lloyds share price is soaring. What should I do now? The Lloyds share price has doubled since September. Can it keep going? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds Bank share price has touched 50p. Here’s what I’d do now appeared first on The Motley Fool UK.
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  22. Barclays share price versus Lloyds share price: which would I buy today? (20/04/2021 - The Motley Fool UK)
    Next week might be exciting for long-suffering UK bank shareholders. The UK’s Big Five banks — including Lloyds Banking Group (LSE: LLOY) and Barclays (LSE: BARC) — all report first-quarter earnings. HSBC Holdings leads on Tuesday, with Barclays and NatWest Group finishing on Friday. With US banks reporting bumper profits for Q1, I’m monitoring the Barclays share price and the Lloyds share price to see which offers the better bargain. Here’s what I think. The Lloyds share price and Barclays share price slip At its 52-week peak, the Lloyds share price closed at 45.02p on 13 April 2021. Now it stands at 42.62p, dipping 2.4p (5.3%) in a week. Likewise, Barclays shares peaked at 190.34p on 30 March 2021. They have since slid to 183.78p, losing 6.56p (3.4%). Maybe these shares will get an uplift when banks unveil their figures next week? After all, the banking regulator has allowed British banks to resume paying dividends. Also, three of the Big Five are buying back their shares, boosting future returns for shareholders who sit tight. This could provide support for Barclays shares and the Lloyds share price. Already, the FTSE 350 Banks index is the third-best performer of 40 FTSE 350 sectors in 2021, rising 15.5% this calendar year. Lower loan losses would be good for banks Across the Atlantic, the Big Four US banks made blow-out profits as financial markets boomed. They also boosted their bottom lines by reversing much of last year’s loan-loss reserves. With UK banks beefing up bad-debt provisions in 2020, some of these billions could flow back, pushing up profits. Again, this could boost the Lloyds share price and Barclays shares. Similarly, if demand for credit picked up in Q1/21 and loan growth resumed, this would be a relief for banks. But if credit keeps shrinking, or loan losses rise, that spells bad news. British banks are also keen to arrest shrinking net interest margins (NIMs). The NIM is the margin/spread between lending rates and savings rates. In 2020, Barclays UK’s NIM was 2.61%, the best of the Big Five, while Lloyds’ NIM was 2.52% (placing second). If these two banks can sustain or improve their NIMs, then this might underpin the Lloyds share price and Barclays stock. But if NIMs keep falling, that’s another body blow. Best stocks to buy now: Barclays or Lloyds? As a value investor, I use company fundamentals to guide my buying decisions. Thus, when weighing up the Lloyds share price, I compare it to peers and the wider market. Here’s how Barclays and Lloyds stack up, head to head.   2021E Q4 2020 2021E 2021E   P/E P/B Dividend Yield Dividend Cover Lloyds 10.8 0.83 4.0% 2.29 Barclays 11.0 0.69 2.9% 3.09 Source: A J Bell Based on price-to-earnings (P/E) ratio, the Lloyds share price is slightly cheaper than Barclays. Also, Lloyds has a higher dividend yield (4.0%/year v 2.9%), but the Barclays pay-out is better covered by earnings. In terms of price-to-book (P/B) ratios, Barclays offers greater ‘bank for my buck’ (0.69 at Barclays v 0.83). As a value hunter, Lloyds appears to be better bet for me. But Barclays, unlike Lloyds, is still big in investment banking. And this sector boomed in Q1/21 for US banks. So Barclays might enjoy an extra boost from higher investment banking revenues. That’s why I’m sitting on the fence. Today, I’d happily buy both the Lloyds share price and Barclays shares! One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading After a 15% rise in 2021, is the Lloyds share price heading for a strong recovery? Why I’d forget the Lloyds share price and buy this UK bank share! Here’s why I think the Barclays share price could climb in 2021/22 As the FTSE 100 hits 7,000, I’d buy its only penny stock I think these 2 FTSE 100 stocks might be among the best shares to buy today Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Barclays share price versus Lloyds share price: which would I buy today? appeared first on The Motley Fool UK.
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  23. Lloyds share price: will it rise if the dividend makes a comeback? (20/02/2021 - The Motley Fool UK)
    This week two FTSE 100 banks — Barclays and NatWest reinstated their dividends along with their earnings releases. I think this raises expectations that Lloyds Bank (LSE: LLOY) will do the same when its financial results come in next week. The Lloyds share price took quite the fall last year when it stopped paying dividends.  Why did Lloyds Bank stop paying dividends? Lloyds Bank was hardly the only FTSE 100 biggie to stop paying dividends. As the pandemic spread, many companies foresaw (and in many cases rightly so) a sharp downturn in business. This led them to stop dividend payouts.  For LLOY, and indeed all other banks, however the situation was a bit different. The Bank of England directed them to stop dividends as a precaution. Banking sector health is crucial to the functioning of the entire economy, and the financial crisis of 2008 has taught invaluable lessons in keeping them healthy. As a result, UK’s banks couldn’t reinstate dividends at will. It’s only after the BoE lifted the restriction at the end of 2020 that they have been able to do so.  Will Lloyds Bank reinstate dividends too? Other banks and other FTSE 100 companies are getting back to paying dividends now. This alone is reason for LLOY to get back to doing so as well, considering that it’s probably been one of the more attractive features of the stock. A look at the long-term Lloyds share price chart makes it clear that it isn’t a growth stock. I would think that LLOY will bear this in mind when making its earnings announcement.  Should I buy the Lloyds Bank share? Which brings me to the million dollar question — should I buy the Lloyds Bank share. It’s an important question going by the stock’s popularity, in terms of daily trading volumes. I’d consider the three points below before buying the stock: Can the Lloyds share price rise from here? There’s no doubt that it has improved vastly since the lowest point it saw in September last year. It’s almost at double those levels. It is still below its pre-pandemic levels though, suggesting it can rise.  Can Brexit uncertainty play on the stock? With no deal in place yet on financial services, the sector is stuck in limbo. Uncertainty isn’t good for the Lloyd’s share price, I would imagine.  How much will be its dividend payout? Even if it does start paying dividends again, will it be on par with earlier levels? If the dividend yield turns out to be low, it may not be worthwhile for the investor.  The upshot There are clearly risks to the Lloyds share price. Lack of Brexit clarity and a slow economy being among them. On the other hand, a continued stock market rally, a potential dividend payout or a high actual payout and expectations of the good UK economic growth in 2021 work in its favour.  I’m going to wait for its results to see its performance, its dividends’ stance, and its outlook before making a call. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading If I’d invested £1,000 into Lloyds shares a year ago, here’s how much it’d be worth today The Lloyds share price is climbing in February. Should I top up my holding? I’m avoiding the Lloyds share price. I prefer this 5% dividend yield stock instead! Should I buy Lloyds Banking Group shares now? Lloyds share price: should I buy in February 2021? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds share price: will it rise if the dividend makes a comeback? appeared first on The Motley Fool UK.
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  24. The Lloyds share price: 1 reason to buy and 1 reason to sell (10/07/2021 - The Motley Fool UK)
    Lloyds Banking Group (LSE: LLOY) has done well so far in 2021 and, over the past 12 months, it’s up more than 50%. But the Lloyds share price remains stubbornly short of the 50p level, briefly exceeding it in June, but then quickly falling back. As a long-term Lloyds shareholder, should I give up on waiting and sell? Or should I buy more? I can see arguments from both sides. The reason to buy now is a simple one. Valuation. Looking at fundamental measures alone, ignoring the underlying business (which I’ll come back to), Lloyds does look cheap to me. But after the pandemic crash, it takes a bit of digging for me to get to it. On the face of it, the Lloyds P/E multiple might seem high. I’ll leave out forecasts, as they’re surely even less certain than usual right now. Lloyds ended 2020 on a P/E of around 30, after a big Covid-crunched profit drop, and that’s not great. But if Lloyds can get profits back somewhere around 2018 and 2019 levels, that could come tumbling down. P/E set to fall? On today’s Lloyds share price, EPS figures in the pre-pandemic range would give us a P/E somewhere between eight and 14. At the upper end, I’d say that’s fair. At the lower end, I reckon it’s cheap. My favourite valuation metric though, is dividend yield. After all, I bought Lloyds for dividend income. Lloyds had to withhold dividends during the pandemic on the instructions of the Prudential Regulation Authority. But at Q1 time the bank said it has been “accruing dividends with intention to resume progressive and sustainable ordinary dividend policy.” So we should get them back. And pre-pandemic levels would yield around 6.5%, or better. These two measures, P/E and dividend yield, make me think the Lloyds share price is too low now. Economic outlook This all assumes that the future for Lloyds as a business is all rosy. And it might not be. My Motley Fool colleague Royston Wild has outlined what he sees as the bearish side of Lloyds. In short, it’s our fragile economic outlook. Never mind pundits who are going on about how well we’re recovering now lockdown measures are easing. No, that recovery is from a very low level to a not-much-higher level. Covid-19 restrictions look set to be fully lifted later this month. So will that signal a new economic surge? Maybe, but maybe not. Even the new health secretary Sajid Javid is suggesting new cases could rise to as high as 100,000 per day. And in Wales, ministers are suggesting that we need to learn to live with Covid. Lloyds share price pressure Royston also points to the current low-interest environment, which isn’t great for banks. He suspects, and I agree, that we’ll have low rates for quite some time to come. I can’t see them rising until we’re firmly back into economic growth, which I don’t expect any time soon. So what’s my take, buy or sell? The key thing for me is Lloyds’ apparent confidence in the future of its dividends. At today’s Lloyds share price, I’m more likely to top-up than sell. The post The Lloyds share price: 1 reason to buy and 1 reason to sell appeared first on The Motley Fool UK. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading The Lloyds share price continues to slide. Should I buy now? This is what I’m doing about the Lloyds share price! Where will the Lloyds share price go in July and beyond? Lloyds share price: 3 reasons I’d buy today The Lloyds share price: 3 things that could give it a boost Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  25. The Lloyds share price is falling again! Should I take advantage and buy? (12/02/2021 - The Motley Fool UK)
    The Lloyds (LSE: LLOY) share price has been falling again over the past week. Shares in the lender have declined just over 3% since Monday. It appears that concerns about the group’s exposure to the fragile UK economy are behind the decline.  This decline is just the latest in a string of ups and downs. Over the past six months, the Lloyds share price has increased in value by around 25%. However, over the past 12 months, the stock is down 36%. Over the past five years, it is off 40% excluding dividends.  Put simply, the bank has been a tough investment to hold over the past five years. But, with the outlook for the UK economy improving, should I make the most of the latest decline and buy the shares?  Is the Lloyds share price on offer?  Shares in Lloyds tend to move in tandem with the UK economic outlook. As one of the country’s largest lenders, that’s understandable. If the economy starts to stutter, the bank will likely be one of the first businesses to report a decline in sales and rising loan losses.  I think this is the reason why the Lloyds share price has been so volatile over the past half-decade. Brexit and the coronavirus crisis have been two challenging headwinds for the UK economy. As such, it has been difficult to predict what the future holds for the economy and the country’s largest companies.  However, at least one of these headwinds has now been removed. Brexit has happened, and while some sectors have suffered from the changes, overall, the economy seems to have taken the changes in its stride so far.  That leaves coronavirus. So far, the pandemic’s impact has not been as bad on Lloyds and its peers as initially expected. Unfortunately, we won’t know the crisis’s ultimate impact until it’s over. That suggests to me that this headwind will continue to weigh on the Lloyds share price in the near term.  Mixed outlook It’s difficult to predict how Lloyds will cope in the world after the pandemic and over the long term. It’s impossible to tell what the economy will look like 12 months from now, and how quickly it will recover.  Therefore, while the stock might look attractive after its recent declines, projecting future growth is almost impossible. That makes it difficult for me to say whether it is worth buying the stock today. On the one hand, the Lloyds share price could be a great way to play the UK economic recovery. But on the other hand, if it is impossible to tell what the future holds for the UK economy, it is also impossible to say what the future holds for the bank.  Still, I am cautiously optimistic about Lloyds’ outlook, but I am wary of the risks involved. So, I would buy the stock for my portfolio today, but it wouldn’t be a large position.  There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading The Lloyds share price: 2 reasons I’m keen right now, but 2 big risks I’d note UK share investing: why I’d ignore Lloyds and buy these 2 cheap FTSE 100 shares Lloyds’ share price: here’s what concerns me The Lloyds share price is recovering but here’s why I won’t buy back in Why I’d ignore Lloyds and buy other cheap UK shares for my ISA! Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is falling again! Should I take advantage and buy? appeared first on The Motley Fool UK.
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  26. Forget the Lloyds share price! I bought this FTSE 100 stock instead (26/07/2021 - The Motley Fool UK)
    Is Lloyds Banking Group (LSE: LLOY) one of the best-value FTSE 100 stocks to buy today? Well, a quick glance at City forecasts would suggests that one of the UK’s favourite penny stocks could be too cheap to miss right now. At 46p per share, the Lloyds share price trades on a forward price-to-earnings (P/E) ratio of around 7 times, well inside the widely-regarded bargain-benchmark territory of 10 times and below. This is built on broker expectations that the bank’s earnings will soar 425% in 2021. On top of this, analysts think Lloyds will turbocharge 2020’s full-year dividend of 0.57p per share to 2.2p in 2021. This results in a mammoth 4.7% dividend yield, which takes out the broader FTSE 100 average of around 3%. Why I’m avoiding Lloyds I have to confess I’m not tempted by the Lloyds share price. Okay, a steady rebound in the British economy could deliver strong and sustained profits growth at this most cyclical of UK shares. But I still think the FTSE 100 bank is still a risk too far. This is because: A fresh spike in Covid-19 infections in Britain could significantly derail the economic rebound and thus a surge in Lloyds’ profits. One scientist has suggested a whopping 200,000 new daily cases of the coronavirus could emerge before too long. Low Bank of England interest rates look set to stay, regardless of how badly this fresh wave of infections turns out. As well as facing a long road back from the global pandemic, the UK economy will also require support as it adjusts to Brexit changes. Rock-bottom rates reduce the difference that Lloyds can charge borrowers and give to savers, hitting profits in the process. Competition from challenger banks is rapidly increasing. The emergence of digital-only banks like Revolut and Monzo has been a serious thorn in the side of traditional banks in recent years. And it looks like the problem is going to get much worse for Lloyds and its established peers. Allied Market Research reckons the neo and challenger bank market will be worth a jaw-dropping $471bn by 2027. That compares with closer to $20bn in 2019. A better FTSE 100 share to buy So why take a chance with the Lloyds share price when there are so many other more robust FTSE 100 shares to buy today? For example, I bought building materials supplier CRH in my Stocks and Shares ISA. Like Lloyds, profits at the company could suffer if rising Covid-19 infections hit the construction industry again. But I still bought it as infrastructure spending looks set to rise strongly across its key US and European markets over the long term. I also like CRH’s strong track record when it comes to acquisitions and its ongoing commitment to M&A. CRH’s shares aren’t anywhere near as cheap as Lloyds. Today, it trades on a forward P/E ratio of 17 times. But I think its higher price reflects the company’s far superior investment prospects.  The post Forget the Lloyds share price! I bought this FTSE 100 stock instead appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading 3 UK penny stocks I’d buy now 2 penny stocks to buy today 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Lloyds shares: opportunity or warning? Why Lloyds’ share price could make it a top dividend buy Royston Wild owns shares of CRH. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  27. The Lloyds share price: what have I learned from it? (11/03/2021 - The Motley Fool UK)
    If any share makes me wonder what lessons I’ve missed over the past 10 years, it’s Lloyds Banking Group (LSE: LLOY). And I know my biggest weakness isn’t knowing when to sell. I bought at around 90p per share, and the Lloyds share price is now hovering around 40p. So I’d clearly have been better off had I sold, but how could I have known when? I like to look forward in my investment thinking. But we have to learn from our mistakes. And, more importantly, looking back can help me decide what to do in the future. I bought Lloyds shares when the banking sector was emerging from the financial crisis, and dividends were just reappearing. Lloyds, along with what was then Royal Bank of Scotland (now NatWest Group) had come through their government bailouts. RBS was about a year behind in getting its dividend back, and I went for Lloyds — in part because I saw significantly less uncertainty. And the Lloyds share price was recovering. But roll on to 2016 and the Brexit referendum. The result shocked me. I really wasn’t expecting it to even be close. Banking shares quickly lost ground, so should I have sold then? Here’s where I definitely made a mistake. I like to follow Warren Buffett’s approach to situations like that. When something rocks one of my companies, I should step back and look at the whole thing afresh. The need to step back Thinking about it in terms of my Lloyds, the bank I knew so well, that was my error. I should have abandoned all I knew, and done my analysis from scratch again. Had I done that, would I have sold? Well, I’d have been shaken by the amount of uncertainty the Brexit result had thrown up. I held shares in a strengthening bank operating in a Europe-wide market, with London being the banking centre of the continent. That, the core of the bank’s strength, was thrown away overnight, and yet I sat on a tumbling Lloyds share price and did nothing. We didn’t know what the full fallout of that referendum result would be. We didn’t know what banking rights the UK would be left with. But we surely did know that things would never be the same again. I don’t know if I’d have sold had I approached it properly. But I did make a key mistake of not taking full account of what happened. Latest Lloyds share price crash But what about the Covid-19 pandemic? Since that took hold, the Lloyds share price has crashed by 30%. So was that another missed selling opportunity? No, I don’t think so. I certainly wouldn’t have been quick enough to sell before the initial crash — and I don’t do panic selling anyway. The Lloyds share price fell more than 30% in a couple of weeks, and slumped to a 50% loss not long after. But it’s recovering. Saying that, the banking sector has changed fundamentally again. And again, that means it’s time to re-evaluate from scratch. I think I’ve done a better job of it this time. And with dividends returning (again), I’m definitely not selling now. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Lloyds share price forecast: is 50p obtainable this year? The Lloyds share price has increased by almost 50%. Here’s what I’d do This is what I’d do right now about the Lloyds share price The Lloyds share price keeps falling! Should I buy the stock now? Lloyds Bank share price: back to pre-crash levels of 40p. Should I buy it now? Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price: what have I learned from it? appeared first on The Motley Fool UK.
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  28. Where will the Lloyds share price move in the future? (02/09/2021 - The Motley Fool UK)
    At the start of 2021, the Lloyds (LSE: LLOY) share price seemed to be gaining momentum. However, peaking in June at just under 50p, the share price has since dropped over 12%. Lloyds has delivered a stellar 62% year-on-year return, but can pit regain this trajectory in the future? UK economy and housing Lloyds is a British retail and commercial bank. It doesn’t operate overseas and doesn’t have an investment banking arm. This makes the firm heavily reliant on the UK economy. As my fellow Fool Roland Head pointed out, Lloyds is planning to enter the landlord market, building and renting out properties to the UK public. It’s already the UK’s largest mortgage lender so has experience in the housing market. And I expect the added revenue from rent to push up the Lloyds share price in the future. However, this move isn’t likely to provide an immediate boost for the bank. Looking more broadly at the UK economy, it seems a rise in inflation could be on the horizon. Analysts from the National Institute of Economic and Social Research indicated that CPI could rise to 3.9% in early 2022. This is almost double the Bank of England’s target. If this is the case, we will likely see interest rate hikes, which could complement the Lloyds share price as banks will be able to charge higher rates for lending. Again, this factor is likely to be a longer-term benefit for the Lloyds share price, but the coming months may grant more clarity on CPI direction. Inflation outlook As Lloyds is so heavily reliant on the UK economy, it’s worth examining inflation forecasts further. In the US, Fed Chairman Jerome Powell has hinted he believes US inflation to be transitory. Most recent price gains have occurred in categories such as cars, flight tickets, and hotel rooms. This is to be expected as the economy reopens after the pandemic. Therefore, it could be rational to assume that any UK inflation concerns may also be short term, which may limit growth in the Lloyds share price beyond 2022. That said, Michael Sanders of the Monetary Policy Committee (MPC) alluded to a tapering of Quantitative Easing (QE) in July. QE is the purchase of government bonds by banks to create new money in the economy. This signifies longer-term inflation for the UK economy, which could be good news for the Lloyds share price. Lloyds share price: my verdict I think the biggest factor for the Lloyds share price moving forward will be how inflation pans out. At the moment, there seems to be no clear-cut direction for future interest rates. I will be closely monitoring the MPC and Fed announcements over the next few months before considering purchasing any UK bank shares. The post Where will the Lloyds share price move in the future? appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading The Lloyds share price drops since June. Is it a bargain now? How long could it be until the Lloyds share price gains serious momentum? Will the Lloyds share price finally start to move in September? How Lloyds Bank stock can confound value investors The best FTSE 100 dividend shares to buy for 2022 Dylan Hood has no position in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  29. 5 reasons I think Lloyds share price can touch 60p (15/05/2021 - The Motley Fool UK)
    Lloyds Bank (LSE: LLOY) has seen some rocky times in recent years. It was impacted by Brexit and the limbo around it, a indifferent economy, and the corona crisis. The effect can still be felt, to be sure.  But things are looking up.  This is evident from its improving financials, expectations of better asset quality, and the return of economic growth. Lloyds share price trends upwards It is little wonder then that the Lloyds share price has been on a roll. From the end of January it is up by over 45%. Over the past year, it is up by an even more impressive 68%.  As I write, it is at 48p. This means, in a single bullish trading session it can touch 50p. In my last article on the Lloyds share price, I had raised the question of whether it was possible.  My conclusion was that it could read 50p. I saw this happening in months, if not less.  It is almost there in just over two weeks already. How about 60p for the Lloyds share price? This leads me to the next question. Can the Lloyds share price rise to 60p? Again, I think it can. Here are five reasons why. #1. Improving financials: Lloyds Bank’s next set of results is likely to see continued improvements as fundamental aspects impacting the bank’s business are in its favour. Stock prices can move upwards when the company releases positive updates or results. We can expect some share price increase when that happens.  #2. Continued stock market rally: I expect the stock market rally to continue. Even though the FTSE 100 index has had a wobble in the past few days, its broad trend is upwards. This should positively impact the Lloyds share price as well. #3. Possible return of high dividends: Low present dividends reduce banks’ attractiveness to investors. But there is little banks can do about it. Dividends are based on regulatory guidance, which luckily, is expected to be temporary. As the economy goes back to normal, these measures should be withdrawn. This could add further momentum to the Lloyds share price, which had a high dividend yield before the pandemic.  #4. Encouraging past share price trends: Going by past trends, it has taken a little over three months to add 12p to its share price. Conceivably then, it can rise to 60p in another three months. In other words, the increase is not outside the realm of possibility. #5. The past is proof: At the start of 2020, it was already at 60p levels, so they are not unheard of or too far in the past to be reached again.  A point to note From present levels, this would mean a 25% increase in the Lloyds share price in a quarter. But unless it can continue to rise even from there, I think a long-term investor should look at the bank more carefully.  For years before the pandemic happened, the bank’s price trend was flat. And after the pandemic, it dropped sharply.  What I’d do now For a long-term investment, I would think this one through first.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Lloyds share price is up 60% in a year! And I still think it’s good value Will the Lloyds share price hit 60p this year? Is the Lloyds share price cheap enough for me to buy the stock? If I could only invest in one banking stock, I would buy Lloyds shares Lloyds’ share price is rising. Should I buy today? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 5 reasons I think Lloyds share price can touch 60p appeared first on The Motley Fool UK.
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  30. Forget the Lloyds share price. These FTSE 100 shares can make me a passive income (03/05/2021 - The Motley Fool UK)
    Lloyds Banking Group (LSE:LLOY) has had its fair share of issues recently. Despite a better couple of months for the Lloyds share price, I would still avoid it and focus on FTSE 100 dividend shares to help make me a passive income. Why I’m avoiding the Lloyds share price Lloyds share price has risen nearly 30% in value during the past three months. I believe this is closely linked to positive updates related to the British economy. The FTSE 100 bank’s fortunes are tied to a strong economy in my opinion. I like to invest for the long term and this is where Lloyds falls down for me. I believe Lloyds will be affected by low interest rates dictated by the Bank of England. These must rise for Lloyds and other banks to deliver healthy profits. I believe the implications of Covid-19 will affect the economy for a long time too. Closure of businesses, the end of furlough and rising unemployment will bode negatively for it. I also fear for traditional banks due to the rise of challenger banks on the scene. The rise of Monzo, Starling, and Metro Bank will only dent Lloyds profits. For now, the Lloyds share price is a no go for me. Dividends across the FTSE 100 I would rather focus on dividend shares that could help make me a passive income. Dividends were cut across the FTSE 100 when the markets crashed and companies scrambled to conserve cash. With reopening on the horizon, there are some juicy dividend payers out there that represent a better option for me than the Lloyds share price.  FTSE 100 tobacco producers Imperial Brands and British American Tobacco stand out. There is definitely an increased focus on investing ethically, so these two tobacco producers may not be everyone’s cup of tea. Imperial Brands offers a dividend yield of close to 10% and British American Tobacco offers just less at 8%. Despite some of the stigma around smoking firms, these two continue to perform well and distribute healthy dividends to investors which is tempting. Don’t expect the reported demise of the tobacco industry to come to fruition any time soon in my opinion. Steel maker Evraz is another FTSE 100 dividend payer I really like. A forecast yield close to 11% makes me sit up and pay attention. The risk with Evraz is the fact that the commodities market is a volatile one, almost as volatile as the Lloyds share price. This has been displayed when Evraz experienced a turbulent time and caused its dividend to be erratic. In addition to Evraz, other commodities firms also carry a high dividend yield. These are Rio Tinto which offers 10% and BHP Group on 7.6%. Year ahead I have pinpointed a few FTSE 100 dividend shares that stand out to me. The few I have identified definitely represent a better investment that the Lloyds share price right now for me. In terms of the year ahead, the banking sector could be about to experience a bounce back in 2021. Analysts predict the traditional banks to bounce back and even offer higher dividends. I think dividend yields will still be low but better than 2020 for sure. Like the Lloyds share price, the Rolls-Royce share price has struggled in the past year. Here’s what I believe may happen over the coming months for Rolls-Royce. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds share price is rising: here’s what I’d like to do As the Lloyds share price rises, I’d still consider buying The Lloyds share price is up again. Should I buy some more? The Lloyds share price is headed back to 50p. Would I buy it? The Lloyds share price is flying! Should I buy LLOY today? Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Forget the Lloyds share price. These FTSE 100 shares can make me a passive income appeared first on The Motley Fool UK.
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  31. Could this dividend news boost Lloyds’ share price? (13/07/2021 - The Motley Fool UK)
    Lloyds Bank (LSE: LLOY) shares have had a good run recently. This year, Lloyds’ share price is up about 30%. Over 12 months, the FTSE 100 bank stock is up nearly 60%. Can Lloyds shares keep rising? I think it’s certainly possible. Today, there has been some big news on the dividend front. And I’m not convinced this news is fully priced into the stock at present. Lloyds shares: dividend ban lifted The news I’m referring to is in relation to the Bank of England’s (BoE) ban on UK bank dividends. Early last year, the BoE banned UK banks such as Lloyds from paying out dividends to shareholders. The aim was to ensure UK banks had enough capital on hand to support the economy during the coronavirus pandemic (the worst economic conditions in 300 years). In December, the BoE eased the ban slightly, which allowed Lloyds to pay a very small dividend (0.57p per share) for 2020. However, this morning, the regulator completely removed the dividend ban, saying its stress test had shown the banking sector is well-placed to cope with the impact of Covid-19 on the economy. Big dividends on the way? This development is great news for Lloyds’ shareholders. This year, City analysts expect the UK bank to pay out dividends of 2.08p per share. At Lloyds current share price of 47.6p, that payout equates to a prospective yield of 4.4%. That’s very attractive in the current low-interest-rate environment. Share price boost Indeed, it’s so attractive that I think it could increase demand for Lloyds shares from both private investors (ie retirees seeking income) and institutions such as pension funds. This could potentially push Lloyds’ share price up further. It’s worth noting that immediately after the BoE dividend news, analysts at Jefferies raised their price target for Lloyds shares from 55p to 57p. That’s about 20% above the current share price. When you consider that Lloyds shares currently have a forward-looking price-to-earnings (P/E) of less than eight and offer a prospective yield of around 4.4%, they certainly look attractive from a value-investing point of view. Risks to consider Of course, there are plenty of risks to consider with Lloyds shares. One is that the actual dividend for 2021 could be very different from the dividend forecast. The figure of 2.08p per share I mentioned above is simply the average analyst estimate. At times, these consensus forecast figures can be way off the mark. At this stage, we really don’t know what kind of dividend Lloyds will pay for 2021. Earlier this year, the bank said it would update the market on interim dividend payments with its half-year results. Another risk to consider is there could be further Covid-19 setbacks for the UK economy. This could impact Lloyds’ profitability and share price. It’s worth noting that the UK economy grew more slowly than expected in May. Overall however, I think the outlook for Lloyds’ share price is attractive. I wouldn’t be surprised if its shares rise further in the second half of the year, and beyond. The post Could this dividend news boost Lloyds’ share price? appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 2 penny stocks to buy in July Can the Lloyds share price recover again? Should I buy Lloyds shares to add to my portfolio today? The Lloyds share price: 1 reason to buy and 1 reason to sell The Lloyds share price continues to slide. Should I buy now? Edward Sheldon owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  32. Buying the Lloyds Bank share? Here are 3 metrics I’d consider first (30/03/2021 - The Motley Fool UK)
    The Lloyds Bank (LSE: LLOY) share price has had a good run in the last six months. Vaccine development and the stock market rally, being allowed to pay dividends again, and an improved economic outlook have given momentum to the stock.  So should I buy it now? I’d consider the following three metrics first before making the call: #1. Share price change In the past half-year, the Lloyds Bank share price has risen more than 60%. This is strong growth, but the question I would ask here is – how does it compare to its peers’ performance?  Of the other FTSE 100 banking entities – Barclays, HSBC, Standard Chartered and NatWest – I compared it to the first two. Standard Chartered has not seen any appreciable share price increase in the past year and Natwest is loss-making right now, so they were not similarly comparable. The Lloyds Bank share price has indeed risen faster than HSBC, which has grown 42%. But it is still far lower than Barclays’ 90% share price growth.  #2. Dividend yield What the Lloyds Bank share lacks for in terms of price increase, however, it can make up for in dividend yield.  Here too, the Lloyds Bank share sits somewhere in the middle. It has a dividend yield of 1.5%, compared to Barclays’ smaller yield of 0.5% and HSBC’s higher yield of 2.5%.  Considering both share price increase and dividend yield in mind, the Lloyds Bank share is not unattractive. But I would bear two more points in mind here: There are FTSE 100 growth stocks with higher dividend yields around (like, Rio Tinto). I would look at these too, rather than restrict myself to banks. Banks’ dividends are capped for now by guardrails set out by the Bank of England. This is a temporary measure, but it does mean that banks’ yields are likely to be less competitive than other stocks for the time being.  #3. Earnings per share To assess if it can pay a higher dividend, I look at the earnings per share (EPS) number as well. A higher EPS indicates that the bank can continue to pay dividends and possibly even increase them.  The Lloyds Bank share is in a weak place on this measure. Its EPS, at 1.2p, is way lower than that for both Barclays and HSBC at 8.6p and 19p respectively. While I would keep this in mind, given that 2020 was a bad year I would take it with a pinch of salt for now. The verdict for the Lloyds Bank share On the whole, based on these three metrics, the Lloyds Bank share does have merit. Right now, it is a growing stock that pays a dividend. Its dividend yield, however is low and going by its current EPS numbers, it does not look likely that this FTSE 100 stock will become a huge income generator anytime soon. At the same time, I think things can improve for the Lloyds Bank share as the economy reopens and rebounds, and banks’ business takes off. It is on my investing radar.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds share price is up 76% in six months. Am I too late to buy? UK shares to buy now: 3 I think can double my money in 3 years The Lloyds share price still looks cheap to me! I’d buy it today in an ISA The Lloyds share price is rising: should I buy now? Why I’d ignore the Lloyds share price and buy this cheap UK share right now Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, HSBC Holdings, Lloyds Banking Group, and Standard Chartered. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Buying the Lloyds Bank share? Here are 3 metrics I’d consider first appeared first on The Motley Fool UK.
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  33. Lloyds Banking Group shares: bull vs bear (15/09/2021 - The Motley Fool UK)
    Bullish: Alan Oscroft Why am I bullish about Lloyds Banking Group (LSE:LLOY) shares, after seeing them tumble since I bought back in 2015? It’s all about the income for me, and I see enough indications of progressive dividend growth in the coming years. The interim dividend was restored this year, and I think we could easily be back to yields above 4% before much longer. Will the cash be there to drive that dividend growth? Lloyds is the UK’s biggest mortgage lender, and I’m seeing no signs of house sales cooling. At least, the nation’s housebuilders are reporting strong demand and healthy order books. Times of low interest rates are not good for banks, but they won’t be here forever. We’re already seeing inflation coming back, with the annual rate leaping to 3.2% in August. If there’s much more of that, those rates could soon rise. Lloyds has generated some uncertainty with its foray into the rental homes business. Its venture with Barratt Developments plans to build 50,000 rental properties over the next 10 years. And that’s really not the kind of thing that conservative financial sector investors expect banks to be doing. But I’ve been optimistic about the long-term future of the housing market for a long time. And I don’t see anything to change that view — certainly not the short-term pandemic slowdown. I have a number of real estate investment trusts on my Stocks and Shares ISA watchlist. But now I already have one, sort of. And when the market is at its most bearish towards a sector, that’s the time to buy, right? Alan Oscroft owns shares of Lloyds Banking Group. Bearish: Royston Wild I’m not surprised to see the Lloyds share price trending lower again. In fact I think the FTSE 100 bank could have a lot further to fall if (as I suspect) the UK economy shows signs of fresh struggle, raising the prospect of renewed revenues weakness and a rise in bad loans at Britain’s banks. Latest data showed the domestic economy grow just 0.1% in July, the weakest result since January and leaving the UK economy 2.1% below pre-pandemic levels. Back then, supply shortages and the ‘pingdemic’ held back growth. These remain significant dangers to cyclical shares like Lloyds as new Brexit customs arrangements gradually come into force and Covid-19 infection rates continue to tick up.  Lloyds also faces the prospect that interest rates will remain low for a long time, further constraining the profits it can make through lending. The Bank of England is tipped to lift its benchmark rate by the end of 2022 at the latest. But of course the timing and the scale of such raises could be disappointing for the likes of Lloyds if the economic recovery does indeed hit the buffers.  I don’t think that Lloyds is a particularly attractive UK share on a long-term basis, either. Banks like HSBC and Santander for example can look to fast-growing emerging economies to drive the bottom line. Conversely, Lloyds has no such exposure to overseas markets to give profits an extra kick. Nor does it have investment banking operations like Barclays with which to boost earnings. I believe the FTSE 100 bank could deliver consistently-weak profits growth long into the future. Royston Wild has no position in any of the shares mentioned. The post Lloyds Banking Group shares: bull vs bear appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading 3 FTSE 100 shares to buy and hold for a decade Is the Lloyds (LLOY) share price a bargain or a value trap? Here’s what you need to know about the Lloyds share price I think Lloyds Bank is one of the best shares to buy now 3 reasons why the Lloyds share price could sink! The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  34. Lloyds share price: here’s my outlook for the rest of the year (07/06/2021 - The Motley Fool UK)
    The Lloyds Banking Group (LSE:LLOY) share price currently trades just under 50p. So is that good? Depending on the historical timeframe you look at, different opinions can be formed. For example, over one year this represents a gain of 44%. Yet over two years, the share price is actually down 15%. Clearly, there’s a mixed story here, and I think this carries forward into the outlook for the rest of the year. Looking back before looking forward From 2015 to 2019, the Lloyds share price traded in a rough range between 50 and 85p. The bank wasn’t setting the world on fire with its offering to customers, but at the same time it was performing OK.  This all changed during the stock market crash in March of last year. The share price plunged through the key 50p barrier, and closed at 27.7p in the first week of April. No one could have predicted the extent of the negative impact that the pandemic would have on the economy. But with the share price currently around 50p, clearly the impact of the pandemic wasn’t fatal for the bank. This was for a few reasons. Firstly, the stock market tries to be a forward-looking barometer. The Lloyds share price fell heavily in that month as investors tried to predict the worst-case scenario. This would mean large losses due to loan and mortgage defaults, both for individuals and companies. It’s true that Lloyds did have to set aside large amounts for the potential losses. In Q2 2020, it set aside £2.4bn in impairment charges just for that quarter. Yet in reality, the impact was less severe, meaning charges could be reduced by the time of the annual report. Another reason why the shares have bounced back from the lows is that Lloyds is heavily exposed to the UK economy. But the outlook for the economy is much better now than it was a year ago. Positive sentiment has therefore lifted the shares. My outlook for the Lloyds share price So would I buy it today? I’d put my outlook as cautiously optimistic right now. I think the Lloyds share price will continue to have a strong correlation to the UK economy. Retail sales data for April showed monthly growth of 9.2%. If it continues to move higher, this could be good news for Lloyds.  I’m cautious regarding the economy as some parts of it might still be fragile. For example, house prices are soaring, but banks only lent £3.3bn to homebuyers in April, down from £11.5bn in March. Any disruption in this market would impact the economy. It would also be damaging for Lloyds, which is a large lender in this space. The Lloyds share price should be boosted from the resumption of dividend payments. Income investors could start to buy the shares again for the income that comes with them. If the yield moves higher by the end of the year, this should help the Lloyds share price move above 50p.  The risk here is that if the dividend remains low (the payment last month was 0.57p per share), it might struggle to attract any large inflows from income-hungry investors. Overall, I think the Lloyds share price can move higher in the second half of the year, so would be happy to buy it at 50p.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Lloyds Bank share price has touched 50p. Here’s what I’d do now Where will the Lloyds share price go in June? The Lloyds share price is still rising: here’s why I’d buy now I was right about the Lloyds share price. Here’s my outlook now The Lloyds share price is soaring. What should I do now? jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds share price: here’s my outlook for the rest of the year appeared first on The Motley Fool UK.
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  35. Is that share a value trap? (16/02/2021 - The Motley Fool UK)
    When learning about investing, some lessons are harder than others. Putting hard-earned money into what seems like a promising investment only to see it disappear is a painful experience even very experienced investors suffer. That is one reason diversification is so important as a risk management strategy. One big risk investors face is what is known as a ‘value trap’. Here I explain what it is, and the value trap indicators to look out for. What a value trap is We’ve all been tempted by value traps in life. The thing that’s to0 cheap to be true – a holiday, a second-hand car, a doer-upper flat. What looks like a bargain turns out to be anything but. The same applies to shares. A value trap is a share that looks surprisingly cheap, but actually is not cheap at all. Imagine, for example, a company that is heavily reliant on one source of income, such as a medical patent or a particular client. Looking at their earnings for recent years, the shares look cheap. But if it turns out that the future earnings are greatly reduced — the patent expires, the client goes under — then the shares aren’t cheap at all. That’s why it is important to look at a company’s likely future earnings, not just its past record. As well as earnings, I like to look at free cash flow – the money coming in the door. That is a better indication of whether a company is genuinely profitable. Sectoral shifts can be value trap indicators A change in a business marketplace can create value traps. For example, the high street is changing rapidly. I think retailers like B&M are adapting to this and can thrive. But a company like Card Factory faces not only a changing high street, but also shifts in consumer card sending patterns. A single digit price-to-earnings ratio is one potential indicator of a value trap – and Card Factory has that. Five years from now, we could be looking back at Card Factory’s share price today as a great bargain for a well-run business. But equally, we could be looking back wondering why people still believed in the investment case when card shops look like a declining business. Other value trap indicators can include very high yields, a preference for unusual accounting metrics, and high net debt. But none of these is necessarily conclusive. Some companies that look like value traps are in fact great bargains. As the market has marked their chances lower, the share price has tumbled. So they can present a real bargain. Just looking back at lows from last year, it’s incredible that some shares were as cheap as they were. Similarly, while Card Factory faces a challenging retail environment, it is a proven operator and has been able to adapt its offering, growing sales on its website for most of last year by 137%. Greeting card companies are in vogue, as the listing of Moonpig demonstrated. If Card Factory survives and thrives, today’s share price could be a bargain. That’s why I find it worth investigating more about an apparent bargain. Some clear value trap indicators scare me off. But sometimes, a share can look like good value, not a value trap. The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading UK stock investing: 1 of the best growth shares to buy now What I think Covid-19 variants mean for the Rolls-Royce share price Why this FTSE 100 discount retailer is on my best stocks to buy now list Realistic passive income ideas I use Should I buy airline stocks today? Here’s my view on the struggling sector christopherruane has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value and Card Factory. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Is that share a value trap? appeared first on The Motley Fool UK.
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  36. The Lloyds share price is climbing in February. Should I top up my holding? (18/02/2021 - The Motley Fool UK)
    As a Lloyds Banking Group (LSE: LLOY) shareholder, I’m happy to see the price up 12% so far in February. But if you’d told me five years ago that I’d be pleased by a 37p Lloyds share price today… well, you know. The 12-month performance is still pretty shocking, with Lloyds shares down 34% as I write. Obviously that’s all down to the Covid-19 pandemic. Well, actually, maybe not entirely. There must be a Brexit factor there too, but it all leads to pain for shareholders, wherever it comes from. Negativity towards Lloyds does seem to be easing off, though, since Covid-19 vaccine progress has brought some cheer. Since a 52-week low of 23.58p on 22 September 2020, the Lloyds share price has gained 58%. It would have been nice if I’d topped up my Lloyds holding back in September, but why am I considering buying some more now, after that impressive rebound? First, I want to look at the downside risks. As my Motley Fool colleague Kevin Godbold has pointed out, Lloyds is facing a potentially tough economic environment. The UK banking industry is a shadow of what we had back before that Brexit referendum. And the trade deal that our Prime Minister seemed so proud of has offered pretty much nothing to the UK’s banks. Lloyds facing uncertain economics Lloyds is UK-focused these days, which I reckon was a wise strategic move. And with a total of more than 30m customers, there’s still plenty of business. But we really don’t know how long the economic hardship from the pandemic will last — and I think Lloyds could be particularly affected by any lingering weakness. We have no real idea of the size of the actual fallout from Brexit either. Our negotiated exit has most definitely not left us with barrier-free trade. So what about the bull case, from today’s rebased Lloyds share price? Well, Barclays has announced a pandemic-related impairment charge amounting to £4.8bn. I’m not going to try to guess at what Lloyds’ figure might be, but we’ll know soon enough. Lloyds will be releasing 2020 full-year results on 24 February. I think there could be some painful reading there. But the latest from Barclays reflects some of my reasons for feeling bullish about Lloyds right now. The key development is the reinstatement of Barclays’ dividend. It’s only a modest 1p per share for 2020, but it’s a start. On top of that, Barclays plans to buy back £700m of its own shares. Boss James E Staley reckons shareholders should see a meaningful improvement in returns this year. Lloyds share price down on the day The markets reacted unenthusiastically, marking Barclays down 4.5% on the day (at the time of writing). The contagion spread too, with the Lloyds share price pegged back 3.7%. Will there be a more positive reaction to Lloyds’ results next week? City analysts are expecting to see the Lloyds dividend reinstated this year, with some predicting a forward yield of better than 4%. And we’re looking at a price-to-asset value for Lloyds of only around 0.5 now. Those measures make me want to buy more. Yes, I see some serious risks ahead. But even accounting for them, I’m tempted by the Lloyds share price. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’m avoiding the Lloyds share price. I prefer this 5% dividend yield stock instead! Should I buy Lloyds Banking Group shares now? Lloyds share price: should I buy in February 2021? The Lloyds share price is falling again! Should I take advantage and buy? The Lloyds share price: 2 reasons I’m keen right now, but 2 big risks I’d note Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is climbing in February. Should I top up my holding? appeared first on The Motley Fool UK.
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  37. The Lloyds share price drops, despite a dividend comeback (29/07/2021 - The Motley Fool UK)
    Despite releasing a solid set of half-year results, Lloyds Banking Group (LSE: LLOY) shares slipped on Thursday. Hence, the Lloyds share price still lurks below its 2021 high hit two months ago. The Lloyds share price lifts, then dips On Thursday morning, the Lloyds share price briefly rose, peaking at 47.9p. However, the stock later lost its shine to close down 0.62p (-1.3%) at 46.16p. This was in spite of the bank raising its full-year targets as the UK economic outlook improves. I see two sweet spots in the £32.8bn bank’s latest results. First, Lloyds is a giant in UK mortgages, accounting for roughly one in five (20%) home loans. With house prices hitting record highs, Lloyds is a winner from the booming housing market. The UK’s largest retail lender unveiled a £2bn pre-tax profit for Q2/21. This was £0.8bn — two-thirds (+66.7%) — higher than the average analyst forecast of £1.2bn. In Q2/20, the bank lost £676m, making this a huge turnaround. However, given the housing market is cooling, this may explain why the Lloyds share price declined today. Second, Lloyds set aside huge sums in 2020 against expected credit impairments (loan losses). As UK vaccination numbers soar and the economy grows, the bank can free up some reserves. Lloyds released £333m of loan-loss reserves and this sum drops straight into the bank’s bottom line. If Covid-19 infections keep falling and UK growth continues, then more impairments could be reversed. Again, this might provide future boosts to the Lloyds share price. Lloyds gets stronger Two more improving metrics might also support the Lloyds share price. First, the bank’s return on tangible equity (ROTE) soared to 24.4% in Q2/21, versus 13.9% in Q1/21 and 5.9% in Q4/20. Thus, the group is making substantially higher returns from its asset base. Second, Lloyds’ common equity tier 1 (CET1) ratio — a key measure of its financial strength — increased to 16.7% at the end of June, versus 16.2% at the end of 2020 and 14.6% in mid-2020. This is well ahead of the bank’s 12.5% target and the regulatory minimum CET1 of 11%. These improved results allowed Lloyds to restore its cash dividend, cancelled on the bank regulator’s orders last year. The interim dividend will be 0.67p, worth roughly £475m across nearly 71bn shares. Nevertheless, this is a long way from the total dividend of 3.21p paid for the 2018 financial year. Perhaps investors were hoping for a higher base dividend, with selling contributing to the decline in the Lloyds share price today? I like the look of Lloyds Looking forward, Lloyds expects a softer second half for 2021. It expect its full-year ROTE to be around 10%, while it anticipates a NIM (net interest margin; a measure of lending profitability) of around 2.5%. However, staff costs are expected to rise after the return of employee bonuses, cancelled in 2020 due to the pandemic. Meanwhile, the Lloyds share price lies 8.7% below its 52-week high of 50.56p, hit on 1 June. Although the Lloyds share price is up more than a quarter (+26.7%) in 2021, there may be more to come. I don’t own Lloyds stock currently, but I’d buy LLOY at the current price as a pure recovery play. However, if the Delta and other Covid-19 variants continue to cause problems globally, or growth reverses, then I’d hesitate to invest in Lloyds and other British banks! The post The Lloyds share price drops, despite a dividend comeback appeared first on The Motley Fool UK. One Killer Stock For The Cybersecurity Surge Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028 — more than double what it is today! And with that kind of growth, this North American company stands to be the biggest winner. Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it… We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify. Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time… More reading Lloyds shares: 3 reasons I would, and wouldn’t, buy this FTSE 100 stock What’s next for the Lloyds share price? Will the Barclays and Lloyds share prices recover in 2021? Forget the Lloyds share price! I bought this FTSE 100 stock instead 3 UK penny stocks I’d buy now Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
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  38. The Lloyds share price is rising, but I’d buy these stocks instead (16/04/2021 - The Motley Fool UK)
    Lloyds Bank (LSE: LLOY) had a hard 2020, to be sure. But the Lloyds share price has come a long way from its lowest point. It has doubled, in fact.  Why the Lloyds share price could underwhelm There is much to like about Lloyds Bank as a company. It is one of the UK’s largest banks, with a long legacy. The bank has recovered from more than one downturn. It is profitable even at a time when interest rates are low and retail banking is its biggest income generating segment.  But there are challenges to it as well. Being UK-centred is great when the economy is booming, but a recession here would impact Lloyds Bank more. Peers like HSBC would be more protected because they are geographically diversified. Brexit is likely to impact it more too.  Moreover, Lloyds dividends are capped by the banking regulator for now. As a result, it has a low dividend yield of 1.3%. While this is a temporary restriction, I reckon it is holding the Lloyds share price back. Pre-pandemic, a high dividend yield made it an attractive stock.  I think it is because of these reasons, and the fact that the UK is still partly in lockdown, that the Lloyds share price is held back even now. At its last close of 43p, the share was 27% below the levels where it started 2020.  Will it come back to those levels? It could, but I am not holding my breath. If past trends are anything to go by, the Lloyds share price is unlikely to grow consistently.  What I’d do now Much as I want to get behind the stock, purely because the bank has strong credentials, I would like to see its performance post-pandemic for longer before making a call. In the meantime, I will focus on fast growing stocks that have far more predictable share price trends. Or at least are less pricey than the Lloyds share, which has a price-to-earnings (P/E) ratio of over 35 times right now.  FTSE 100 stocks I like FTSE 100 stocks like Spirax-Sarco Engineering and Halma, the provider of technology solutions for safety, are two examples of companies that have seen broadly rising share prices.  Both of them are ahead on the key metric I am tracking right now to assess established companies’ financial health right now – profits. They reported profits in 2020, despite the year being what it was. In my view, this positions them well for a year when growth will return. However, they have higher earnings ratios, than Lloyds, which needs to be kept in mind.  I also like FTSE 100 miners, all of which have consistently lower earnings ratios than Lloyds Bank. Among these, I like Rio Tinto right now, which has come off its highs. Others like Glencore and Anglo American, on the other hand, are touching multi-year highs at present.  One catch to miners is that their rally is being driven by huge public spending, primarily from China. If that were to slow down, their fortunes could turn. But whether that will happen is a matter of some debate.  There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading What does Lloyds’ final dividend payment mean for shareholders? Here’s why I expect the Lloyds share price to have a great 2021/22! Why I’d ignore the rising Lloyds share price and buy other UK growth shares Are Lloyds shares making a comeback? I was right about the Lloyds share price! Here’s what I’d do now Manika Premsingh owns shares of Glencore. The Motley Fool UK has recommended Halma, HSBC Holdings, and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is rising, but I’d buy these stocks instead appeared first on The Motley Fool UK.
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  39. Will 2022 be the year the Lloyds share price takes off? (04/09/2021 - The Motley Fool UK)
    Lloyds (LSE: LLOY) has been a pretty poor investment to own over the past few years. After the financial crisis, the lender struggled to rebuild. But after around a decade, it was finally standing on its own two feet.  The group had restructured its balance sheet, slashed costs, and streamlined operating processes. It had also acquired credit card business MBNA and launched a wealth management arm to help diversify.  Despite these efforts, the bank’s been hamstrung by low-interest rates. Lloyds share price headwinds  The bank’s basic business model’s relatively straightforward. These institutions take money from clients or depositors, pay them a rate of interest, and then loan the money out at a higher interest rate. The gap between the interest rate paid to depositors and received from borrowers is known as the interest rate spread.  Banks only have a limited level of flexibility when it comes to setting interest rates. The Bank of England sets the interest rate for the whole country, and lenders like Lloyds have to base their rates on this benchmark.  As interest rates have languished, the Lloyds share price has struggled to move higher. The group’s interest rate spread has remained relatively constant over the past decade, but its balance sheet has shrunk as the enterprise has exited non-core operations. As such, the company’s earning the same return but on a lower level of assets.  If interest rates rise, Lloyds’ interest rate spread should increase. This should help boost profit margins, reversing a decade-long trend.  The market estimates that the Bank of England will begin to increase interest rates next year. Only a modest hike is expected, but it is something. This will allow Lloyds to increase the rate it charges borrowers and hopefully improve its profit margins. If the bank can improve its profit margins, the Lloyds share price should begin to reflect its improving outlook. Risks ahead   Unfortunately, this isn’t guaranteed. The UK banking market’s highly competitive. Even if the Bank of England hikes interest rates, intense competition in the market may prevent lenders from increasing costs for borrowers. This could hold back the performance of the equity.  Other challenges the group has faced since the financial crisis include higher costs and increased regulation. Neither of these headwinds will reverse if interest rates start to rise. Therefore, the lender’s profit margins may remain under pressure.  Despite these risks, I think the outlook for the Lloyds share price is improving. The economic fallout of the coronavirus crisis was nowhere near as bad as some analysts were expecting. As a result, the bank has exited the crisis in a relatively strong position. This should enable the enterprise to capitalise on the economic recovery this year and next.  With this being the case, I’d buy the stock for my portfolio as an economic recovery play.  The post Will 2022 be the year the Lloyds share price takes off? appeared first on The Motley Fool UK. Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices Make no mistake… inflation is coming. Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing. Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question. That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… …because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not! Best of all, we’re giving this report away completely FREE today! Simply click here, enter your email address, and we’ll send it to you right away. More reading Why I prefer the Lloyds dividend to the Rolls-Royce share price The Lloyds share price: time to buy the dip? Where will the Lloyds share price move in the future? The Lloyds share price drops since June. Is it a bargain now? How long could it be until the Lloyds share price gains serious momentum? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  40. The Lloyds share price: here’s what I expect next (27/02/2021 - The Motley Fool UK)
    Last week’s 2020 results from Lloyds Banking Group (LSE: LLOY) received a cautious reception from the market. Lloyds’ share price ended the day flat, but I didn’t think the 2020 numbers were too bad. After a tough first half of the year, the bank’s performance was much stronger during the second part of the year. I’m interested in Lloyds shares because I think the bank could be a classic value play. The shares are trading 20% below book value and my analysis suggests the bank’s dividend payout could recover strongly from 2021. A turning point? The PRA — the UK’s banking regulator — barred the big banks from paying dividends last year. Lloyds’ shareholders missed out on the 2019 final dividend and the 2020 interim payout. The dividend ban caused Lloyds’ share price to crash, but the regulator was worried that the pandemic would trigger a wave of bad debt, leaving the banks short of cash. So far, this hasn’t happened. What did happen is that banks including Lloyds allowed dividend cash to pile up on their balance sheets, creating a buffer to handle future losses. I estimate that by cancelling the dividend, Lloyds saved around £2.3bn last year. Banks have now been allowed to restart dividend payments. Lloyds shareholders will receive a payout of 0.57p per share for 2020, giving a yield of 1.5%. That’s the maximum allowed by the PRA for 2020, but if profits recover in 2021, a much bigger dividend should be possible. Profits could double in 2021 We don’t yet know how quickly the economy will bounce back when Covid-19 restrictions finally end. The bank’s management admit that government support measures and payment holidays have probably prevented — or delayed — some business failures and job losses. However, Lloyds’ accounts also show that both consumers and businesses were hoarding cash and repaying debt during 2020. These cash reserves could support a strong recovery for the economy. City banking analysts certainly expect Lloyds profits to stage a strong recovery. Ahead of Wednesday’s full-year results, consensus forecasts suggested that Lloyds’ pre-tax profit could double in 2021. A dividend of 1.6p was pencilled in for 2021, giving a yield of 4.1%. Lloyds share price: what next? There are clear risks here. As a UK-only bank, Lloyds’ performance is heavily linked to the wider UK economy. If the pandemic is followed by a long recession, then the bank’s losses could be greater than expected. This could limit dividend payments. Even if things go well, delivering growth could be tough. Lloyds is already one of the UK’s largest financial institutions. Where can it go next? According to management, the bank’s new strategy will be to focus on becoming the “preferred financial partner” for its existing clients. That means focusing on areas such as wealth management and insurance for existing customers. Corporate clients may be targeted with add-on services such as foreign exchange. I’ve been wrong about Lloyds share price before. But my view today is that Lloyds is in good shape and could satisfy my requirements as a dividend share. I’d consider buying the stock as a long-term hold at current levels. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading The Lloyds share price: what do the latest results mean? Stock market recovery: 3 UK shares to buy today The Lloyds share price: would I buy the stock today? The Lloyds share price spiked to 41p before falling today! Would I buy LLOY now? Lloyds Bank brings dividends back. Is it a good share for me to buy now? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price: here’s what I expect next appeared first on The Motley Fool UK.
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  41. The Lloyds share price is still rising: here’s why I’d buy now (30/05/2021 - The Motley Fool UK)
    When I last looked at Lloyds Banking Group (LSE: LLOY) in April, the Lloyds share price was about 44p. As I write today, it’s 11% higher, at 49p. Despite this continued growth, my view remains the same — I reckon this FTSE 100 stock could return to the 60p level seen at the start of last year. I like Lloyds’ traditional banking model and its big market share. Although banks have had a difficult time over the last decade, I think most of these problems are now in the past. In my view, Lloyds’ shares could be a decent investment today. Why Lloyds? When it comes to investing, I’m a big believer in keeping it simple. If I can’t understand how a business makes money and what might go wrong, then I don’t want to invest. This is one reason why I like Lloyds. Despite its giant size, I think it’s quite a simple business. There’s no investment banking or speculative trading at this bank. All Lloyds really does is lend money to real people (and businesses) and provide everyday banking services. This traditional approach to banking seems to work quite well. Although loan losses rose last year due to the impact of the pandemic, the bank still accumulated surplus capital on its balance sheet. This is the cash the bank is allowed to use to fund dividend payments. Lloyds’ costs are lower than most rivals, too. Wages and other operating costs accounted for 52% of Lloyds’ income during the first quarter. At Barclays, that figure was 61%, at NatWest it was 68%. All else being equal, that means less money is left over for shareholders. Not a sure thing Of course, banking is a cyclical industry. Although the Lloyds share price has risen pretty steadily since the start of this year, there’s no guarantee the bank’s progress will continue. Although the outlook for the UK economy appears to be fairly good at the moment, I think it’s still much too soon to be sure how things will turn out as the pandemic recedes. After an initial surge of pent-up activity, I wonder if we’ll see business activity slow down later this year. Unemployment might rise. One particular risk, in my view, is that interest rates might start to rise. If that happened, I expect house prices to fall sharply, after so many years of ultra low mortgage rates. As the UK’s largest mortgage lender, that would affect Lloyds. Lloyds share price: what I’d do There are no risk-free investments. But I think Lloyds is a fairly safe way to get exposure to the UK economy with an attractive dividend income. Broker forecasts suggest the bank will report an after-tax profit of £4.1bn this year and resume normal dividend payouts. These forecasts price the stock on 8.5 times forecast earnings, with a dividend yield of 3.8%. I think this valuation looks attractive and don’t see any red flags that might put me off. I’d be happy to buy Lloyds shares at current levels. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading I was right about the Lloyds share price. Here’s my outlook now The Lloyds share price is soaring. What should I do now? The Lloyds share price has doubled since September. Can it keep going? 5 reasons I think Lloyds share price can touch 60p The Lloyds share price is up 60% in a year! And I still think it’s good value Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is still rising: here’s why I’d buy now appeared first on The Motley Fool UK.
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  42. The Lloyds share price spiked to 41p before falling today! Would I buy LLOY now? (24/02/2021 - The Motley Fool UK)
    After years and years of share-price declines, could the tide finally be turning for Lloyds Banking Group (LSE: LLOY) and its unloved stock? And could the Lloyds share price get past 50p and reach three figures again? Let’s take a look at today’s news for clues. Lloyds releases its 2020 results. They’re not so bad Today (Wednesday) saw the Black Horse bank unveil its full-year results for 2020. Given that the world is still battling a global pandemic, they’re not as bad as feared. As a result, the Lloyds share price spiked upwards this morning, before sliding back. Being the UK’s largest retail lender in the biggest-ever recession is obviously not ideal circumstances for Lloyds. With over 26m customers, Lloyds has heavy exposure to higher bad debts and loan losses from consumers and businesses. But these impairments totalled a mere £128m in the fourth quarter. Clearly, borrowers are still paying their debts. Thanks to this steep fall in loan-loss provisions, Lloyds actually made a profit in 2020. Yet, as I write, the Lloyds share price now trades fractionally down on the day. In 2020, loan losses at Lloyds totalled £4.2bn. These reserves crashed Lloyds’ pre-tax profit by over seven-tenths (72%) to £1.2bn. Still, this means that Lloyds averaged a monthly profit of £100m in the worst British economy in history. Earnings per share collapsed by two-thirds (66%) to 1.2p. Thanks to this profit, and with approval from the UK banking regulator, Lloyds was able to reinstate its cancelled dividend. It’s only 0.57p a share, but that’s the maximum allowed by the Bank of England at the moment. This equates to just short of a 1.5% dividend yield, based on the current Lloyds share price of 39.06p. At least that’s a start. Despite the economic ravages of Covid-19, the Lloyds balance sheet is in very good shape. Core tier one equity (one measure of financial strength) rose again, this time to 16.2% of risk-weighted assets. This is way above the regulatory minimum laid down by regulations. Also, Lloyds’ net interest margin (NIM) was 2.46% — pretty solid, given the circumstances. Yet the Lloyds share price failed to hold onto earlier gains, spiking to 41p after the market opened, before dropping back by 2p. The Lloyds share price should benefit from recovery In 2020, the Black Horse could barely trot, hobbled by Covid-19 restrictions. But when this big beast starts galloping again, this could inject new life into the Lloyds share price. Of course, if the coronavirus crisis worsens or lingers too long, this spells bad news for British banks. But with mass vaccinations rolling out rapidly across the UK, this gives me cause for optimism. Today, with the Lloyds share price hovering just above 39p, this values this British institution at £27.8bn. That’s a very modest price tag for a very big bank. Right now, Lloyds shares are bang in the middle of their 52-week range between 23.59p on 22 September 2020 and 54.38p on 24 February 2020. In addition, Lloyds is valued at around half of its net tangible book value (0.5 x NTBV). Summing up, Lloyds shares look cheap to me today, assuming that all goes well in the second half of 2021. I might even have to buy some Lloyds stock for my family’s income portfolio! A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Lloyds Bank brings dividends back. Is it a good share for me to buy now? Shares to buy now: why I’d consider Lloyds Banking Group alongside this FTSE 100 stock Lloyds’ share price could make it one of the best dividend shares to buy now Lloyds share price: will it rise if the dividend makes a comeback? If I’d invested £1,000 into Lloyds shares a year ago, here’s how much it’d be worth today Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price spiked to 41p before falling today! Would I buy LLOY now? appeared first on The Motley Fool UK.
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  43. Lloyds’ share price is rising. Should I buy today? (10/05/2021 - The Motley Fool UK)
    Lloyds (LSE: LLOY) shares have been performing well. Since 9 November, when Pfizer announced it had developed a Covid-19 vaccine, Lloyds’ share price has jumped from 27p to 47p, which represents a gain of nearly 75%. Meanwhile, over a 12-month timeframe, the stock is up a little over 50%. Are Lloyds shares worth buying today? Let’s take a look at the investment case. Will the Lloyds share price continue to recover? I think Lloyds’ share price could continue to rise from here. There are a few reasons why. The first is that business conditions for UK banks are improving dramatically now that vaccines are being rolled out. Last week, the Bank of England said it expects the UK economy to grow 7.25% this year – the fastest rate in more than 70 years. This kind of GDP growth should benefit Lloyds which is, essentially, a play on the UK economy. It’s worth noting that in Lloyds’ recent Q1 update, the bank upgraded its guidance for 2021. It now expects interest margin to be in excess of 245 basis points, versus previous guidance was 240 points. Meanwhile, it now expects a statutory return on tangible equity of between 8% to 10%, versus previous guidance of 5-7%. The second is that City analysts are currently upgrading their earnings forecasts for the bank. Over the last month, for example, the consensus earnings per share forecast for 2021 has risen from about 4.3p to 5.6p. This kind of upgrade activity can boost a company’s share price. The third is that sentiment towards beaten-up ‘cyclical’ stocks continues to improve. Recently, investors have been piling money into stocks that could benefit as the world reopens. I think this trend could continue for a while yet. Finally, Lloyds has started paying dividends again. This is an issue I discussed last week. With the bank now intending to resume a ‘progressive’ and ‘sustainable’ dividend policy, it could attract income investors. This could boost its share price further. Should I buy LLOY shares now? Having said all this, Lloyds is not a stock I’d buy today. One reason for this is I have concerns in relation to the long-term outlook for the banking industry. I believe we’re going to see an enormous amount of disruption in this space from financial technology (FinTech) companies such as PayPal, Square, and Wise in the years ahead. With many consumers now using digital wallet apps, such as PayPal and Cash App for savings and payments, banks’ access to cheap funding via current accounts is under threat. Secondly, I think UK interest rates are likely to remain low for a while. This could hinder Lloyds’ profitability going forward as banks make a lot of their money from the spread between lending rates and borrowing rates (which is compressed when interest rates are low). I’ll point out that I do own a few Lloyds shares in my portfolio. I’m going to hold on to them for now. However, I won’t be investing more capital into Lloyds. I think there are better stocks I could buy today. Like this one… FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading As the Lloyds share price stays cheap, I’d invest £5k Will Lloyds pay a dividend in 2021? Why I am buying Lloyds shares now The Lloyds share price leapt 7% last week. But it could go much higher Forget the Lloyds share price. These FTSE 100 shares can make me a passive income Edward Sheldon owns shares in Lloyds Bank and PayPal. The Motley Fool UK owns shares of and has recommended PayPal Holdings and Square. The Motley Fool UK has recommended Lloyds Banking Group and recommends the following options: long January 2022 $75 calls on PayPal Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds’ share price is rising. Should I buy today? appeared first on The Motley Fool UK.
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  44. Are penny stocks worth buying for me? (20/07/2021 - The Motley Fool UK)
    There is something to be said for penny stocks. Owning a piece of a company at a dirt cheap price sounds like a great idea. But I think it is important to consider a whole lot of other things before buying penny stocks.  Penny stocks may not be bargain buys One of them is the long-term share price trend.  Let me give an example here. Consider the share price of the FTSE 100 company Spirax Sarco Engineering. Right now, its share price is over £140, making it the most expensive stock listed on the London Stock Exchange. If I had £1,000 to invest, I would be able to buy only seven shares in the company.  On the other hand, another FTSE 100 stock, Lloyds Bank, has a share price of 43p. With the same £1,000, I can buy a whole 2,325 shares in the company. If that were my only basis for deciding the best share to buy, the Lloyds share price would look so much more attractive!  But, if I look at the five-year share price performance for both shares, the odds tilt in favour of Spirax Sarco. The engineering biggie has seen a 273% share price increase in the past five years. By comparison, the Lloyds share price has declined by 25% over this time. In other words, I would have made some serious gains by buying the pricey stock and would have lost money on the penny stock. It follows that holding far fewer shares of Spirax Sarco would have been a better bet than buying Lloyds Bank shares. Of course, it does not mean that this will happen in the future. Things can change. It only means that a penny stock is not always a bargain buy.  It may just be a good buy! At the same time, there is a possibility that it can be a good buy. For instance, I bought Cineworld shares at sub-100p levels because I see value in the stock. The FTSE 250 cinema chain was compromised severely last year as its operations were limited and it took on debt to continue.  But I believe that it can come back once the corona crisis is well and truly behind us. In fact, I expect that its share price will start rising as the crowds get back into cinemas and that starts showing up in its numbers. However, for now, the share has tumbled to 58p, which is  around a third of its pre-pandemic price. In my view, its drop to penny stock levels indeed makes it a bargain buy.   Here, I am not trying to advocate buying Cineworld shares or not. I am only driving home the point that a penny stock can hold value in an investor’s eyes.  Would I buy penny stocks? The big point here is the following. It matters less whether a stock qualifies as a ‘penny stock’ or not to make it worth buying. Ultimately, I only need to consider whether it will give me good returns over time.  The post Are penny stocks worth buying for me? appeared first on The Motley Fool UK. Our 5 Top Shares for the New “Green Industrial Revolution" It was released in November 2020, and make no mistake: It’s happening. The UK Government’s 10-point plan for a new “Green Industrial Revolution.” PriceWaterhouse Coopers believes this trend will cost £400billion… …That’s just here in Britain over the next 10 years. Worldwide, the Green Industrial Revolution could be worth TRILLIONS. It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Access this special "Green Industrial Revolution" presentation now More reading 2 penny stocks to buy now Best stocks to buy now – this FTSE 100 pick is a great dividend stock! The Ashtead share price has doubled in a year. Is there still time to buy? 3 UK shares I’d buy with £1,000 What to expect from the Netflix earnings report Manika Premsingh owns shares of Cineworld Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  45. The Lloyds share price: 2 reasons I’m keen right now, but 2 big risks I’d note (11/02/2021 - The Motley Fool UK)
    The Lloyds Banking Group (LSE: LLOY) share price has performed well over the past week. In fact, it’s up 10.4%, making it the best performer over this period in the FTSE 100. Unfortunately, if we expand the time horizon, the share is still down 34% over a one-year period. I’d look to buy the share for several reasons, but am conscious of some risks. A better outlook My first reason isn’t particularly technical in nature. Simply put, I think the outlook for the bank (and therefore the Lloyds share price) is much better than last year. The UK managed to avoid a no-deal Brexit. An agreement on financial services is due in coming months. The UK has vaccinated over 13m people against Covid-19. The UK Government is continuing to provide generous fiscal support to try and boost the economy. All of the above are positives for companies trading in the UK. Lloyds is one of these companies, and so is feeling the benefits of this via a short-term move higher in the share price. This isn’t particularly company-specific, but the wider environment is certainly helping. The second reason I like the Lloyds share price is due to the potential dividend resumption. The Bank of England has removed guidance urging banks not to pay dividends. Lloyds returned to a profit of £1bn in Q3, with a loan-to-deposit ratio of 98%. It means it has the liquidity to pay out a potential dividend. Downside risks for the Lloyds share price One big risk I’d note is the gradual reduction in the net interest margin. In the Q3 update, Lloyds specifically flagged this up as a reason why group income was down 17%. The net interest margin stands at 2.42%. This is the difference between the rate the bank lends out at versus the interest it receives. This margin has been decreasing, as the UK base rate has been cut. It takes time for the difference to filter through, and so this move lower is likely going to continue through 2021. There isn’t much the bank can do on this, and so it could be a negative drag on the share price that I should be aware of. The second risk is the delayed impact on finances and loans from Covid-19. The bank has set aside large provisions for bad debt during 2020. Some £4.1bn through to Q3 has been reserved, and Lloyds says it’s a realistic level given “no significant change in economic outlook”. As discussed above, the outlook could be rosy this year. But I think the drag from the pandemic might not be fully appreciated. Consumers and businesses are being supported by furlough cash and other fiscal measures that will stop at some point. In this case, there could be a rise in loan defaults that isn’t currently taken into account by Lloyds or the share price. Overall, I’m looking to buy back into the Lloyds share price shortly, acknowledging the potential risks. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading UK share investing: why I’d ignore Lloyds and buy these 2 cheap FTSE 100 shares Lloyds’ share price: here’s what concerns me The Lloyds share price is recovering but here’s why I won’t buy back in Why I’d ignore Lloyds and buy other cheap UK shares for my ISA! Lloyds share price: why this FTSE 100 bank is on my February watchlist jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price: 2 reasons I’m keen right now, but 2 big risks I’d note appeared first on The Motley Fool UK.
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  46. Lloyds share price: 3 reasons I’d buy today (02/07/2021 - The Motley Fool UK)
    Lloyds Banking Group (LSE: LLOY) is one of the most widely held UK shares. Popular among private investors as well as its employees, Lloyds has hundreds of thousands of individual shareholders. Thus, LLOY is one of the most popular tickers in UK searches. That said, the Lloyds share price has had a tough five years, putting shareholders through the wringer. The share price slumps and soars At its five-year high in May 2017, the Lloyds share price was nearing 72p. After several years of lacklustre performance, the shares closed out 2019 at 62.5p. However, as Covid-19 infections spread in early 2020, Lloyds stock crashed. Unlike many other FTSE 100 shares, Lloyds didn’t hit rock-bottom on ‘Meltdown Monday’ (23 March 2020). Instead, the shares collapsed to a low of 23.58p on 22 September 2020. Just two days later, I wrote, “I see a lifetime of value in Lloyds“, with the Lloyds share price at 24.58p. As I write, the shares hover around 47.41p. That’s an increase of almost 23p per share, meaning that the stock has almost doubled (+92.9%) in just over nine months. Despite this turnaround, I still like the stock. Here are three reasons why. Why I still like Lloyds My first reason for buying at the current Lloyds share price is its decline from recent highs. On 1 June, the stock hit a 2021 high of 50.56p. Since then, it has declined by more than 3p, leaving it 6.2% off its 52-week peak. As a veteran value investor, I relish buying shares when they show weakness. But I do so only if the underlying business case is still solid. For Lloyds, I think nothing much has changed since May. Second, after cancelling its cash dividend in 2020, Lloyds has now restored it, albeit at a much lower level. Lloyds paid a final dividend for 2020 of 0.57p a share on 25 May. An interim dividend for 2021 should be announced with the bank’s half-year results on 29 July, to be paid in late September. As an investor keen on accruing passive income, I hope to see steady (or even steep) rises in this payout as Lloyds returns to post-pandemic health. Third, and most important, this stock still looks cheap to me at the current Lloyds share price. Granted, the bank’s earnings are depressed right now, but are expected to rebound in 2021/22. On a forward basis, a forecast price-to-earnings ratio of eight gives a chunky earnings yield of 12.5%. Such a bumper earnings yield could support a dividend yield of 6.25% a year, twice over. Also, Lloyds has a rock-solid balance sheet and is valued at a steep discount to its underlying assets. Again, these are indicators of deep value among stock-pickers. Beware of Covid-19 setbacks Finally, although I’m currently bullish (positive) for Lloyds’ future, that might change suddenly. As with all banks, Lloyds is very cyclical (geared to the economic cycle). Right now, economists expect a multi-year boom in the UK and global economies. Alas, if new and more deadly variants of Covid-19 emerge, then this might blow up these predictions. Indeed, the threat of further UK lockdowns could send the Lloyds share price spiralling downwards again. In summary, I don’t own Lloyds shares today but, on balance, I’d buy and hold at current levels. The post Lloyds share price: 3 reasons I’d buy today appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading The Lloyds share price: 3 things that could give it a boost 2 penny stocks to buy in July Is the Lloyds share price cheap? Should I buy Lloyds Banking Group stock? Should I buy FTSE 100 shares Lloyds, Tesco, or Glaxo in July? Cliffdarcy does not own shares in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.
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  47. Lloyds share price forecast: is 50p obtainable this year? (10/03/2021 - The Motley Fool UK)
    I recently wrote about how much a £1,000 annual investment in Lloyds Banking Group (LSE:LLOY) would currently be worth. I talk in more detail about it there, but in short I’d be out of pocket several hundred pounds. This isn’t surprising, given that the Lloyds share price has been in a slow downward trend for the last four years. But after hitting a low last September, the price has moved almost 70% higher. So is another 25% move (taking it to 50p) really out of the question? The case for 50p In order for the Lloyds share price to take another leg higher, I think we’d need to see strong quarterly updates later this year. These would need to build on the full-year 2020 results from last month. There were several key elements from the results that give me optimism for 2021. Firstly, the reduction in impairments needed on the loan book. In July 2020, the bank was estimated to need to set aside £4.5bn–£5.5bn in provisions due to the pandemic. The actual year-end figure was £4.2bn. Going into 2021, if new provisions are again lower than expected, this will give investors more confidence that bad debt won’t be a big issue going forward. Secondly, the Lloyds share price could gain thanks to the outlook for dividend payments. These were resumed with an expected dividend of 0.57p per share. If we assume a share price around 40p for when the dividend gets paid, it’s a yield of 1.4%. Nothing spectacular, but definitely a start. Lloyds used to be a popular stock for income investors. So should the yield move higher in 2021, more could buy in for this purpose. Why Lloyds shares might struggle The current CEO, António Horta-Osório, is handing over the reigns after a decade at the helm. This isn’t fresh news, and the market digested this months ago. However, now comes the time where the real uncertainty begins. The new CEO, Charlie Nunn, has experience with HSBC. Yet this is still a big change for Lloyds and so any teething problems this year with the changeover could spell trouble for the Lloyds share price. Another element that I’ve mentioned before is that the outlook for interest rates isn’t positive in the UK. If anything, rates could fall from 0.1% down to 0% this year. This squeezes the net interest margin that’s the traditional way a bank makes money. For 2020, the net interest margin fell from 2.88% to 2.52%. It might not sound much, but if it falls by a similar amount in 2021, it’s bad news for Lloyds shares. Lower margins means lower profits, unless the bank can offset this by other divisions. However, given the lack of a sizeable presence in investment banking or trading in capital markets, it looks like Lloyds will continue to rely on retail banking.  My forecast for the Lloyds share price is that it can reach 50p by the end of the year. However, I expect a lot of this move to come towards the end of the year. The bedding in period of the new CEO, and the time needed to increase the dividends, could weigh on the share price in the short term. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Lloyds share price has increased by almost 50%. Here’s what I’d do This is what I’d do right now about the Lloyds share price The Lloyds share price keeps falling! Should I buy the stock now? Lloyds Bank share price: back to pre-crash levels of 40p. Should I buy it now? Why I’d ignore the Lloyds share price and buy this UK share from the FTSE 100 jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Lloyds share price forecast: is 50p obtainable this year? appeared first on The Motley Fool UK.
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  48. The Lloyds share price is up 76% in six months. Am I too late to buy? (29/03/2021 - The Motley Fool UK)
    The Lloyds (LSE: LLOY) share price has soared 76% from a low of 23.98p just six months ago. Nevertheless, at a current 42.26p, the price remains well below its pre-pandemic level of over 60p in early 2020. Am I too late to buy? Or can the shares continue their recovery? Here, I’ll discuss how my view of Lloyds has changed over the last decade, and give my take on the upside potential and downside risk at the current share price. Lloyds and the economic cycle Banks’ profits wax and wane through the economic cycle. Their valuations do too — and in a broadly predictable manner. On this score, price/tangible net asset value (P/TNAV) is a useful measure. The chart below shows the highest P/TNAV Lloyds was rated at by the market in each quarter, from the end of 2013 to the first quarter of the current year. In early 2014, Lloyds’ P/TNAV reached 1.7. This turned out to be the bank’s peak valuation in the cycle between the 2008/9 recession and last year’s pandemic recession. From 2014, investors became increasingly unwilling to pay as much for Lloyds’ assets. Yet the bank’s profits were rising and dividends were back on the agenda. So, what was going on? The UK has suffered eight recessions across the eight decades since World War II. Five years after the 2008/9 recession, Lloyds’ declining P/TNAV reflected the market beginning to price-in the next economic downturn. Value strategy With highly cyclical stocks like Lloyds, I favour a value approach over long-term buy-and-hold. That’s to say, I favour buying when the P/TNAV is around its cyclical low and selling before the market starts pricing-in the next recession. In the cycle we’ve just experienced, Lloyds’ P/TNAV high of 1.7 in 2014 was markedly lower than in the previous cycle. Meanwhile, its 2020 P/TNAV low — not shown on the chart, but 0.46 — was higher than the low of the 2008/09 recession. I was looking for a P/TNAV in the 0.33 area for Lloyds last year. In hindsight, I think I was too greedy. I reckon the UK’s post-financial-crisis banking reforms — countercyclical capital buffers and so on — put something of a cushion under the P/TNAV low. I also now reckon the reforms mean Lloyds’ 1.7 P/TNAV high in the last cycle is probably a new normal too. Lloyds share price and P/TNAV today In future, I think my value play will be to buy Lloyds when its P/TNAV is around 0.5 and sell at around 1.5. But where does this leave me now? Lloyds’ P/TNAV is 0.81 at the current share price of 42.26p. If the economy is in a sustainable recovery, I could still enjoy some very decent returns from Lloyds by buying the shares at today’s price. Set against this is the risk of a double-dip recession. The economy could slump when the government winds down financial support for people and businesses. Having already missed a significant expansion in Lloyds’ P/TNAV, I think it may be a little late for me to buy, in terms of risk-managing my value strategy. If I’d taken the plunge last year, I’d have locked in a good margin of safety and would see the stock as a hold right now. As it is, I may have to wait for the next economic cycle to play out, unless a double-dip recession provides me with a buying opportunity. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading UK shares to buy now: 3 I think can double my money in 3 years The Lloyds share price still looks cheap to me! I’d buy it today in an ISA The Lloyds share price is rising: should I buy now? Why I’d ignore the Lloyds share price and buy this cheap UK share right now Will the Lloyds share price recover in 2021? G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Lloyds share price is up 76% in six months. Am I too late to buy? appeared first on The Motley Fool UK.
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  49. The Lloyds share price is up 50%. I’d still buy. (11/06/2021 - The Motley Fool UK)
    Shares in Lloyds (LSE: LLOY) have put in a solid performance of late. Over the past 12 months, the Lloyds share price is up 50%. Even after that increase, I would still buy Lloyds shares for my portfolio. Here are three reasons why – and one risk I see. Leading high street position Lloyds itself has a well-known brand name and iconic black horse logo. Not only that, the group owns other banking brands with regional strength, such as Halifax and Bank of Scotland. That means that the company is well-positioned to keep attracting new business long into the future. With a large branch network, growing online presence, and market leading position in mortgage lending, I see Lloyds’ prominence in customers’ minds as an asset. It should help the company continue to generate substantial revenues and profits in future. Clear strategic focus Banking, when performed efficiently and cautiously, can be highly profitable. History shows that many banks stumble by getting involved in exotic markets or costly investments without properly assessing the risk. That is what caused the last financial crisis – but it’s also what caused many bank failures across the preceding centuries. Lloyds has a very clear strategy. I think that could help bolster the Lloyds share price. It is squarely focussed on its home market. It is also specialised in retail and commercial banking. So, for example, it doesn’t have the investment banking exposure of rival Barclays, or the global presence of UK-listed banks like HSBC and Standard Chartered. That risks lower profits when other markets outperform the UK, for example. But it also cuts risk in my view, by making the whole business easier to understand and manage. On top of that, it makes sense to focus on UK banking as a way to capitalise on its strong position in this market. Dividend impact on the Lloyds share price The company has restored its dividend. While it is still constrained by its regulator as to how much it can pay, Lloyds is currently paying out the maximum it can. It has also indicated it plans to return to a progressive dividend policy. Meanwhile, the company’s CET liquidity ratio at 16.7% is well ahead of its target of around 12.5%. In layman’s terms, that means the cash pile it could use to help fund future dividends has been growing. As the dividend grows, I expect that to help boost the Lloyds share price. So I would still buy the bank’s shares today, both for income and growth potential. Lloyds share price risk However, all shares carry risks and this is true of Lloyds. For example, the heavy exposure to the UK housing market may be positive right now. But in the event of a housing market downturn, it could leave the bank nursing heavy provisions for bad loans. That could damage both revenues and profits. My next move I already hold Lloyds in my portfolio. But I continue to see it as an attractive investment opportunity at the current price. I would consider adding more Lloyds shares to my holding. The post The Lloyds share price is up 50%. I’d still buy. appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading The Barclays share price gains 25% in 2021, with Lloyds at 35%. Which is better now? Lloyds share price: here’s my outlook for the rest of the year The Lloyds Bank share price has touched 50p. Here’s what I’d do now Where will the Lloyds share price go in June? The Lloyds share price is still rising: here’s why I’d buy now christopherruane owns shares of Lloyds Banking Group and Standard Chartered. The Motley Fool UK has recommended Barclays, HSBC Holdings, Lloyds Banking Group, and Standard Chartered. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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