So far, 2024 has been a good year for investors. The S&P 500 is up 8.8% since 29 December 2023, while the Nasdaq Composite is 8.9% ahead. Even the FTSE 100 has joined the party, rising 7.7%. But the Barclays (LSE: BARC) share price has easily thrashed these indexes since the turn of the year.
Barclays shares soar
At the end of 2023, Barclays stock closed at 153.78p. Then they started to slide, as has happened so many times before. On 13 February, they closed at 140.48p, down 8.7% in 2024.
However, the Barclays share price has staged a huge comeback since Valentine’s Day. As I write, it stands at 210.05p, having surged by almost half (+49.5%) since 13 February. This leaves this popular stock 36.6% higher in 2024, valuing the Blue Eagle bank at £31.5bn.
After this recent boost, the shares are up 36.8% over one year and 33.4% over five years. I’m sure these numbers will be welcomed by the bank’s long-suffering shareholders. Even better, they exclude cash dividends, which have risen steeply at British banks.
I wish we’d bought in October
At its 52-week low on 30 October 2023, this stock slumped to 128.12p. Back then, I knew that these shares were a screaming buy. Indeed, on 2 November, I wrote, “Barclays shares look compelling value to me right now”.
Alas, I was unable to muster enough cash to back my belief at that time. Thus, I missed out on an opportunity to make a return of up to 64% in just over six months. Rats.
That said, my wife and I have been Barclays shareholders since July 2022, paying 154.5p a share for our stake. To date, we have racked up a paper gain of 36%, which is pretty good from a ‘boring’ Footsie share.
In addition, we have also been paid four cash dividends during this time, totalling 15.25p. These equate to almost a tenth (9.9%) of our initial investment — and were our primary motivation for owning this stock.
The shares could have further to go
At the current share price, Barclays stock trades on 8.2 times earnings, which is no longer ‘cheap’ in historical terms. What’s more, its dividend yield of 3.8% a year is now below the 4% yearly cash yield from the wider FTSE 100.
In other words, I don’t regard this stock as crazily cheap any longer. Then again, I have no idea what might happen to the Barclays share price in the short term. It might keep rising, or reverse — who can say?
That said, analysts expect UK bank earnings to fall in 2024, driven lower by weak credit growth and rising bad debts. And who knows, perhaps things could be even worse in 2025?
Despite these concerns, I have no intention of selling this stock today, because I’m a long-term value investor. But if things were to go badly wrong for Barclays, then I might quickly change my mind!
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Cliff D’Arcy has an economic interest in Barclays shares. The Motley Fool UK has recommended Barclays. 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.
