The Lloyds Banking Group (LSE: LLOY) share price is one of the most closely watched in the London market. That’s because these shares are a popular pick among value investors, ranging from top fund managers to individual shareholders (including me).
Alas, Lloyds shares have been a brutal value trap for years. Indeed, this stock has been stuck in a rut for so long, it’s been a long-term lemon since the global financial crisis of 2007-09.
The Lloyds share price’s losing streak
As I write (before market close on Tuesday, 21 November), Lloyds shares stand at 42.68p. This leaves them 8.3% above their 52-week low of 39.42p (reached on 24 October), valuing this business at £27.1bn.
At its 2023 high, this stock hit 54.33p on 9 February, but has been nowhere near ever since. Here’s how the share price has performed over five different timescales:
One month
+3.1%
Six months
-9.1%
2023 to date
-5.9%
One year
-6.1%
Five years
-25.3%
Other than a 3% bump over the past month, the Lloyds share price looks lost. As well as going nowhere this year, it’s lost almost a quarter of its value over a half-decade. Then again, these returns are not all they seem.
Lloyds is a dividend dynamo
The above figures exclude cash dividends — regular cash distributions paid by some companies to their shareholders. Here are the dividends per share the Black Horse bank has paid over the last five years:
Financial year
2023
2022
2021
2020
2019
2018
Total dividend
0.92p*
2.4p
2p
0.57p
–
3.21p
*Interim dividend only
For much of the Covid-19 crisis of 2020-21, the Bank of England barred key British banks from paying dividends. Thus, Lloyds paid no dividends for its 2019 financial year. Later, it returned to distributing surplus cash with a payout of 0.57p for its 2020 financial year.
In total, this UK banking giant has paid out dividends of 9.1p a share over five years. That comes to more than a fifth (21.3%) of the current share price. Even so, in terms of total returns with dividends reinvested, Lloyds shares have made barely any ground since late 2018.
I own Lloyds shares for the long run
At current levels, Lloyds stock offers a healthy cash yield of 5.9% a year, comfortably covered by trailing earnings. That’s almost 1.5 times the 4% yearly dividend yield of the wider FTSE 100 index.
Disclosure: my wife and I bought into Lloyds at a share price of 43.7p in June 2022. To date, we are sitting on a capital loss on paper of 2.3%. However, this is more than offset by our (reinvested) dividends so far.
What next for the Lloyds share price: 30p or 60p? I strongly suspect that it will be the latter — given that the price got within 5.67p of this milestone before March’s US banking crisis crashed financial stocks. Then again, I could be accused of ‘talking up my own book’, given that I already own Lloyds shares.
Finally, with the UK economy weakening and consumers struggling with higher interest rates and energy bills, 2024 looks set to be a tough year for financial firms. Nevertheless, I’m very confident that the Lloyds share price will soar past 60p during my ownership!
The post What’s next for the Lloyds share price, 30p or 60p? appeared first on The Motley Fool UK.
Should you buy Lloyds Banking Group now?
Don’t make any big decisions yet.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.
And he believes they could bring spectacular returns over the next decade.
Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows…
When such enormous changes hit a big industry, informed investors can potentially get rich.
So, with his new report, Mark’s aiming to put more investors in this enviable position.
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
Grab your FREE Energy recommendation now
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Could the Lloyds share price grow 2x anytime soon?
Are Lloyds shares good for passive income?
Would I be silly not to buy Lloyds shares at 43p?
How cheap is the Lloyds share price?
8.4% dividend yield! Here’s the dividend forecast for Lloyds shares to 2025
Cliff D’Arcy has an economic interest in Lloyds Banking Group shares. 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.
