Up 37% in 2024, the Barclays share price is thrashing the market!
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To this point, 2024 has been a very good yr for traders. The S&P 500 is up 8.8% since 29 December 2023, whereas the Nasdaq Composite is 8.9% forward. Even the FTSE 100 has joined the celebration, rising 7.7%. However the Barclays (LSE: BARC) share worth has simply thrashed these indexes for the reason that flip of the yr.
Barclays shares soar
On the finish of 2023, Barclays inventory closed at 153.78p. Then they began to slip, as has occurred so many occasions earlier than. On 13 February, they closed at 140.48p, down 8.7% in 2024.
Nonetheless, the Barclays share worth has staged an enormous comeback since Valentine’s Day. As I write, it stands at 210.05p, having surged by nearly half (+49.5%) since 13 February. This leaves this well-liked inventory 36.6% greater in 2024, valuing the Blue Eagle financial institution at £31.5bn.
After this current increase, the shares are up 36.8% over one yr and 33.4% over 5 years. I’m certain these numbers might be welcomed by the financial institution’s long-suffering shareholders. Even higher, they exclude money dividends, which have risen steeply at British banks.
I want we’d purchased in October
At its 52-week low on 30 October 2023, this inventory slumped to 128.12p. Again then, I knew that these shares had been a screaming purchase. Certainly, on 2 November, I wrote, “Barclays shares look compelling worth to me proper now”.
Alas, I used to be unable to muster sufficient money to again my perception at the moment. Thus, I missed out on a possibility to make a return of as much as 64% in simply over six months. Rats.
That stated, my spouse and I’ve been Barclays shareholders since July 2022, paying 154.5p a share for our stake. To this point, we have now racked up a paper acquire of 36%, which is fairly good from a ‘boring’ Footsie share.
As well as, we have now additionally been paid 4 money dividends throughout this time, totalling 15.25p. These equate to nearly a tenth (9.9%) of our preliminary funding — and had been our main motivation for proudly owning this inventory.
The shares may have additional to go
On the present share worth, Barclays inventory trades on 8.2 occasions earnings, which is not ‘low cost’ in historic phrases. What’s extra, its dividend yield of three.8% a yr is now beneath the 4% yearly money yield from the broader FTSE 100.
In different phrases, I don’t regard this inventory as crazily low cost any longer. Then once more, I do not know what may occur to the Barclays share worth within the brief time period. It would hold rising, or reverse — who can say?
That stated, analysts anticipate UK financial institution earnings to fall in 2024, pushed decrease by weak credit score development and rising dangerous money owed. And who is aware of, maybe issues might be even worse in 2025?
Regardless of these considerations, I’ve no intention of promoting this inventory in the present day, as a result of I’m a long-term worth investor. But when issues had been to go badly incorrect for Barclays, then I’d shortly change my thoughts!