Lloyds Banking Share Price (LLOY)

Share Name Share Symbol Market Type Share ISIN Share Description
Lloyds Banking Group Plc LSE:LLOY London Ordinary Share GB0008706128 ORD 10P
  Price Change % Change Share Price Shares Traded Last Trade
  0.64 2.05% 31.86 257,371,185 16:45:55
Bid Price Offer Price High Price Low Price Open Price
31.435 31.47 31.695 29.935 30.015
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Banks 42,356.00 4,393.00 3.50 9.1 22,443
Last Trade Time Trade Type Trade Size Trade Price Currency
18:34:28 O 525,994 30.817 GBX
Related Shares
Hsbc (HSBA), Banco Santander (BNC), Permanent Tsb (IL0A), Metro Bank (MTRO)

Lloyds Banking (LLOY) Latest News (6)

Lloyds Banking News

Date Time Source Headline
09/4/202006:07ALNCFAlliance News Flash Headline
08/4/202018:30UKREGLloyds Bank PLC Lloyds Bank C$ Buyback
08/4/202018:02DJNUK Businesses Say Banks Still Processing Emergency Loans Too Slowly
08/4/202016:42UKREGLloyds Banking Group PLC Second Price Monitoring Extn
08/4/202016:36UKREGLloyds Banking Group PLC Price Monitoring Extension
07/4/202011:14DJNLloyds Bank PLC Cash Tender Offer - 12% Capital Securities
07/4/202010:43UKREGLloyds Bank PLC Cash Tender Offer - 12% Capital Securities
07/4/202010:41DJNLloyds Bank PLC Cash Tender Offer - Outstanding Senior Notes
07/4/202010:11UKREGLloyds Bank PLC Cash Tender Offer - Outstanding Senior Notes
07/4/202007:30DJNLloyds Bank PLC Cash Tender Offer - Outstanding Senior Notes
More Lloyds Banking News
Lloyds Banking Takeover Rumours

Lloyds Banking (LLOY) Discussions and Chat

Lloyds Banking Forums and Chat

Date Time Title Posts
09/4/202003:37Black Beauty: A Recovering Quadruped299,966
08/4/202019:34Lloyds Bank (LLOY) 'On Topic only' - Thread9,024
06/4/202016:35LLOYDS - A RISING STAR IN THE FINANCIAL WORLD!!!21,427
06/4/202008:27Black Beauty: A Recovering Quadrupled320
06/4/202008:10Boris/Nero1

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Lloyds Banking (LLOY) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2020-04-08 17:34:4630.82525,994162,095.57O
2020-04-08 17:31:4931.4643,67713,738.60O
2020-04-08 17:29:4131.86340,000108,324.00O
2020-04-08 17:29:4131.86622,373198,288.04O
2020-04-08 16:48:4431.13436,379135,822.96O
View all Lloyds Banking trades in real-time

Lloyds Banking (LLOY) Top Chat Posts

DateSubject
08/4/2020
09:20		Lloyds Banking Daily Update: Lloyds Banking Group Plc is listed in the Banks sector of the London Stock Exchange with ticker LLOY. The last closing price for Lloyds Banking was 31.22p.
Lloyds Banking Group Plc has a 4 week average price of 27.70p and a 12 week average price of 27.70p.
The 1 year high share price is 69.99p while the 1 year low share price is currently 27.70p.
There are currently 70,442,102,615 shares in issue and the average daily traded volume is 442,684,811 shares. The market capitalisation of Lloyds Banking Group Plc is £22,442,853,893.14.
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05/3/2020
14:04		m4rtinu: Skinny - thanks for link. Another view on the Lloy share price from the aptly named Motley Fool, which anyone of us could have written. (Well, Ok, not me but most of you :) hTTps://uk.finance.yahoo.com/news/why-lloyds-share-price-continuing-114814499.html Chavi - ex div for the final of 2.25 on 16/4 is correct. So to get that divi you must not sell before then.
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23/2/2020
08:39		xtrmntr: From Motley Fool.Where will the Lloyds share price be in 5 years?Any successful investor looks beyond short-term stock fluctuations and focuses more on the longer term. When I refer to the longer term in this sense, I am speaking of five years or more.The reasoning behind this mindset is that stocks may be priced away from their fair value in the short term. This can be due to market sentiment, when fear or excitement lead investors to overlook the fundamental value of a company.From this in mind, when we look at the Lloyds Banking Group (LSE: LLOY) share price, what can we say about its longer-term fair value? Where might the share price be in five years?Things we knowLet us take a look at the things we know today that we can use to make reasonable conclusions about the share price in the future.The bank has been cutting down on costs and shifting strategy over the past few years, moving with the times regarding online and mobile banking. In 2020, another 56 branches within the banking group are set to close, taking the total to over 200 closures since 2014. The bank also recently announced a partnership with Microsoft as part of a 'digital transformation strategy' focusing on new cloud-based desktops, which should have a knock on impact for customers.The bottom line as I see it that Lloyds is clearly well positioned for the changing banking environment. This makes me think that if the business is positioned well, the profitability will come naturally, which will have a positive impact on the share price. Things we don't knowWhen trying to forecast any reasonable period into the future we need to allow for external factors that will influence the share price and that are outside the control of the business itself. We call this systemic risk.For Lloyds, arguably the largest systemic factor for the next five years will be the impact of Brexit. The government has until the end of this year to negotiate a trade deal with the EU and other nations, and financial passporting rights will be something of key interest for banks in the UK. Added to this is general sentiment from the public regarding Brexit, and as Lloyds is a retail-focused bank, its share price will be a barometer for this sentiment.Putting this all together, I think that the digital strategy implementation will set up the share price for gains over the next five years. While we do not know what will happen with Brexit negotiations, the fact that there is now a majority party in power at Westminster should make the stalemate we saw for much of 2019 less of a problem going forward. I see no reason why in five years the share price cannot be trading around 90p, the levels last seen in 2015. A top stock with enormous growth potentialSavvy 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.Not only does this company enjoy a dominant market-leading position...But its capital-light, highly scalable business model has been helping it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns ... in fact, in 2019 alone it returned a whopping £151.1m to shareholders in dividends and buybacks!And here's the really exciting part...We think now could be the perfect time for you to start building your own stake in this exceptional business-especially given the two potentially lucrative expansion opportunities on the horizon that our analyst has highlighted.
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16/2/2020
13:16		xtrmntr: From Motley Fool.Over five years, the share price of Lloyds Banking Group (LSE: LLOY) has fallen by 24%. Yet there's much to like about the bank, from its dividend yield and potential for growth, to its sector-leading cost control and its evolving business model.Opportunities for growthOne of the big attractions of the shares has to be the dividend yield, which has leapt to 5.6% since the bank reintroduced paying a dividend in 2014. Dividend growth has tended to be consistent and with earnings greater than the dividend payout, there's room for it to keep on growing in the years to come.Its move into wealth management in a link with Schroders is also a possible catalyst for the struggling share price. That business has only recently been launched so there's plenty of opportunity for it to make an impact in future financial results, which could boost the share price.Lloyds owns a majority of the venture and the pricing structure has been designed to undercut rivals – a sign that Lloyds and Schroders may be seeking to take a large market share. Other banks are also moving into the space, showing just how attractive and profitable wealth management is as a business.What makes Lloyds greatFrom any investor's point of view, a tight control on costs is a good thing. While HSBC and some other FTSE 100 businesses are often seen to be unwieldy, Lloyds, on the other hand, has a tight grip on its expense account.The cost/income ratio, is under 46% (compared to nearly 48% previously), which is sector-beating and extremely healthy. By closing branches, as it has been doing for years, and becoming increasingly digital, Lloyds can move to reduce costs even further and reward shareholders with higher profits and potentially share buybacks or special dividends.Factors outside of its controlThe external environment also seems to be improving for Lloyds. For now, there's a little more certainty around Brexit in the UK. And the deadline for PPI has now passed, meaning PPI provisions in future financial results should disappear.The UK economy – which Lloyds is very much tied to – is doing better. Figures out just last week showed the dominant services sector of the economy grew, and by more than was expected. It reached its highest rate since September 2018.Lloyds is looking in good shape, but the share price isn't reflecting this. I think this is because of an ongoing fear about Lloyds' reliance on the UK economy and the ongoing questions around Brexit. But the signs are that the economy is improving and analysts at Jefferies International think the shares can reach 78p – a near 37% increase from where they are now. As long as there are no nasty Brexit shocks, I think the Lloyds share price could smash the FTSE 100 this year because it has plenty going for it.A top income share with a juicy 5% forecast dividend yieldIncome-seeking 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 out-of-favour business that's throwing off gobs of cash!But here's the really exciting part...Our analyst is predicting there's potential for this company's market value to soar by at least 50% over the next few years...He even anticipates that the dividend could grow nicely too - as this much-loved household brand continues to rapidly expand its online business - and reinvent itself for the digital age.With shares still changing hands at what he believes is an undemanding valuation, now could be the ideal time for patient, income-seeking investors to start building a long-term holding.
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31/10/2019
18:12		jordaggy: City Index... Last-minute PPI sting won’t be fatal for pay-out plans As it was for Lloyds Banking Group’s main rivals, the tail of the PPI saga had a sharper sting than expected. Charges related to remediation costs for the two-decade long insurance mis-selling issue amounted to £1.80bn in Q3, against £1.67bn expected by analysts. The harsher than forecast hit partly reflects a last-minute gush of compensation claims that brought Lloyds' buyback plans to an abrupt halt in September. The group is arguably the best-defended and best-positioned bank focused on the UK for revenues. Yet it is just as hemmed in by economic challenges as peers. Consequently, substantially accelerated growth remains a distant goal. Shareholders have thereby been more focused on capital growth and prospective returns to assess their investment in recent years. So even the hint of a risk to expected higher dividends and share buybacks can be a big deal, particularly with PPI impact also consuming profit targets for the year. (The trading statement didn’t update the bank’s view on its Return on Tangible Equity goal for 2019). Still, such concerns have been reflected in contained fashion by share price moves in Lloyds (LON:LLOY) stock on Thursday. It retreated by somewhat less than 3% at worst and curbed the loss to about 2% by late morning. Despite Q3 upsets, the buffer of capital Lloyds is obliged to hold as a ratio of total assets improved by a satisfactory extent in Q3. Common Equity Tier 1 Capital stood at 13.5% by quarter end, “in line with the board’s target”. As such, management emits no change to dividend plans and “will give due consideration to the return of any surplus capital at the year end.” Meanwhile, “never say never”, the advice on PPI offered by Lloyds’ previous CEO, remains wise, though post-deadline, claim volumes will continue to decline. Q3 2019 is yet another quarter Lloyds (LON:LLOY) investors would prefer to forget and that’s reflected in a ten percentage-point share price drop over the last ten days. Still, a firm net interest margin emerged as one of the few high points of the quarter at 2.88% vs. 2.87% expected. Cost control also remained in hand. Lloyds is not compounding past mistakes with new missteps. Chart points Over-arching pressure on the shares that could erode more of LLOY’s remaining 9% rise this year should continue, according to technical analysis. The decline since May 2015 is now well established: see the well-corroborated falling trend line since then that was last tagged in mid-October. The 200-week moving average reinforces trend line resistance given that mid-October also featured another failed attempt to get above the 200-WMA, the latest of many rejections in recent years. So long as overhead structures remain intact, objectives will continue to point towards December 2018’s base at 49.53p, and 2019’s 48.2p low from August. These floors are in within reasonable range of June 2016’s post-referendum lows as deep as 46p. Lloyds Banking Group PLC (LON:LLOY). CFD – Weekly
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08/8/2019
11:05		cheshire pete: Alphorn - Brexit discussion on this BB irritates many, which I understand. Have argued consistently though that imv, and again I could be wrong, the LLOY share price short term is linked in part to sterling and the ups and downs of Brexit. Different types of investors, traders to long term holders, some both.
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05/8/2019
23:02		diku: Sometimes I wonder if referendum had never happened where would Lloy share price be now?...
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14/7/2019
09:06		sarkasm: THE MOTELY FOOL Have I missed something? Could the Lloyds share price be heading to 30p? Rupert Hargreaves | Sunday, 14th July, 2019 | More on: LLOY Close-up Of Wooden Blocks With Risk Word In Front Of Businessperson's Hand Holding Magnifying Glass Image source: Getty Images Whenever I’ve covered the Lloyds (LSE: LLOY) share price in the past, I’ve always concluded that the bank has a bright outlook. Its robust capital position, combined with an attractive valuation and market-beating dividend yield, are qualities that appeal to me as an investor. However, for some reason, the market continues to view the business with scepticism. So here I’m going to try and establish if there’s something I’m missing here, and if the bank is really worth much less than its current value. Economic concerns As Lloyds is one of the largest banks in the UK and the largest mortgage lender, its fortunes are tied to the prosperity of the country’s economy. This turned out to be the bank’s undoing in 2007/08 when the global financial crisis took bankers by surprise. Lloyds found itself struggling to survive as losses mounted and had to ask the government for a bailout. Even though the firm has come along way since those dark days, there’s still a chance it could come close to collapse at some point again in future. The possibility is relatively small, but it’s still there. A substantial decline in home prices due to economic recession could leave Lloyds nursing huge losses. Regular stress tests conducted by the Bank of England and other regulators show Lloyds is unlikely to need another government bailout. But, in the worst case scenario, the bank might have to raise additional capital from investors and its dividend will almost certainly be eliminated. Looking back, the UK economy has suffered a substantial economic decline roughly once every 10 years. On that basis, we are overdue a contraction. I think this is probably the most significant risk overhanging the Lloyds share price today. We don’t know when the next economic downturn will arrive or the effect it will have on the bank when it does. One thing we do know is that the bank’s income will fall as the Bank of England will likely reduce interest rates to stimulate economic growth and loan losses will rise in a recession. Further to fall? If the Bank of England reduces interest rates to zero, Lloyds’ growth will evaporate, and a good deal of its earnings will disappear as well. If you assume earnings fall by 50% from current levels back to 2016’s 2.9p per share, I think the stock could fall as far as 30p. That’s assuming a multiple of 10 times earnings, which is slightly above what the stock is trading at the moment. That’s the bear argument for the Lloyds share price, and while I don’t think the UK economy will collapse into severe recession anytime soon, I think it’s always worth considering the worst case scenario for any investment. In the meantime, Lloyds remains, in my opinion, an attractive income stock with its dividend yield of 6% and an attractive valuation of just 7.4 times forward earnings.
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01/7/2019
17:47		waldron: invezz Lloyds share price steady as Jefferies remains bullish Tsveta Zikolova Tsveta Zikolova July 1, 2019 2 min read Share this article! Lloyds Banking Group’s (LON:LLOY) share price has advanced in London in today’s session as Jefferies reaffirmed its bullish rating on the bailed-out lender. Proactive Investors reports that a survey by the broker has revealed that mortgage pricing remains relatively stable, with Lloyds offering the lowest rates. As of 14:18 BST, Lloyds’ share price had climbed 1.18 percent higher to 57.27p as of 14:18 BST, largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 1.32 percent higher at 7,523.47 points. The group’s shares have given up just under 10 percent of their value over the past year, as compared with about a 1.5-percent fall in the Footsie. Jefferies sees Lloyds as ‘buy’ Jefferies reaffirmed the London-listed lender as a ‘buy’ today, with a target of 99p on Lloyds’ share price. Proactive Investors quoted the broker as commenting that a recent meeting with the bailed-out lender’s chief financial officer had suggested that the bank was maintaining its volume weighted pricing at or higher than the market. The broker, however, reckons that the FTSE 100 group is targeting certain channels such as the remortgage market where pricing is more competitive. Jefferies noted that Lloyds should continue to ‘tick the boxes’ on stability of capital and net interest margin, with the likely ‘controversial aspect’ being management’s guidance for flat other income in 2019. The analysts meanwhile do not expect the bailed-out lender’s first-half results to act as a catalyst for the shares. Mortgage market update Proactive Investors further reported that Jefferies’ survey has revealed that Lloyds offers the lowest mortgage rates in the UK. “Lloyds screens optically as more aggressive on pricing (having spent most of 2018 and 2017 in the middle of the pack), at the bottom of the banks we surveyed for lower loan to value (LTV) products (conversely, it appears that the group has priced itself out of the market for high LTV products),” the broker pointed out. RBC recently maintained its ‘outperform217; rating on the bailed-out lender, arguing that the company was the most capital generative of the UK banks and offers a consistent dividend yield of 11 percent. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating, while the average target on Lloyds’ share price stands at 70.69p.
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10/6/2019
12:50		jordaggy: Credit to Bernie: bernie3710 Jun '19 - 11:52 - 130913 of 130913 0 0 0 APR 2019 Barclays vs Lloyds Barclays and Lloyds are the key banks in the UK sector and despite some similarities there is also glaring differences. I often get asked by clients, which is the better of the two? One is the “boring” but steady and the other is “exciting̶1;,but can also be unstable. In this report I have looked at the pair and drawn up some key comparisons. Both have caused investors huge frustrations over recent years but both for very different reasons. Barclays Plc (BARC) Yield 4.32% Identity Crisis There’s no doubting that Barclays has some great businesses when you scratch the surface. It is of course one of the UK’s big four banks with over 23 million customers. It’s also the UK’s leading issuer of credit cards, the leading stockbroker, a leading wealth manager and has a leading investment bank. It is fair to say that Barclays is not the global bank it once was. With the exception of the US, it has largely retreated from foreign markets. Only a few years ago it had major operations in Europe and Africa in particular, but these have been sold off. What we have left is a UK-US focused bank. Expansion is no longer the name of the game. Today it’s all about profits and dividends. Prized Asset One thing that sets Barclays apart from the UK’s other big four banks is its large and sometimes successful investment bank. Investment banking is seen as the riskier but more lucrative cousin of retail banking. Instead of mortgages and current accounts, it involves things like advice on takeovers, raising debt and equity for large corporations and trading of bonds and shares. Barclays is the only British bank to make serious headway in investment banking, boosted by its opportunistic buy of Lehman Brothers core business during the financial crisis. This gave Barclays a leg up to compete with Wall Street’s titans such as Goldman Sachs and Morgan Stanley. Becoming a major player has not come easy or cheap, so it’s understandable why Barclays is reluctant to part with one of its best assets, even if it is unfashionable. While investment banking adds extra volatility to earnings it can also generate mega-money in good times – on a scale that retail banking can never do. While investment banking adds extra volatility to earnings it can also generate mega-money in good times, on a scale that retail banking can never do. And those worried about another financial crisis should note that Barclays has been the first of the major British banks to successfully ring-fence its UK retail operations. The Revolving Door Shareholders like stable leadership and a clear strategy, which is fair enough, but in the last decade, Barclays has provided neither. Barclays vs Lloyds 01 www.atlanticmarkets.co.uk Since 2011, Barclays has had four different CEOs. The principal reason for the high turnover of CEOs has been a continuous series of scandals. As we know, whenever there is a big scandal, the media and politicians call for someone’s head, and in Barclay’s case, that’s been the CEO. Even the current CEO, Jes Staley, has been lucky to survive several scandals. As you’d expect, every CEO has had his own vision for Barclays and has set about making it happen, only to be replaced before he gets the job done. The new guy has then come in and taken the bank in a different direction. While there are no guarantees the present CEO will be around for the long-term, the hope is that the Board of Directors understands that the share price has been hampered by the lack of continuity, so will endeavour to create more stable leadership. Even if it has yet to be rewarded, the new strategy for Barclays seems a lot less complicated. A focus on transatlantic operations will be much easier to understand and manage. We’ve noted that Barclays is now taking a leaf out of Lloyd’s book and continuously using the words simple and straightforward. I don’t think Barclays will ever be a simple as Lloyds, but nor should it try to be. It’s got a better spread of assets and products. You can’t be simple and diversified at the same time. Lloyds Bank (LLOY) Yield 6.19% Lloyds is back to doing what it does best – current accounts, mortgages, personal and business loans, life insurance...sound dull? Thank goodness. Fund managers in the City used to mockingly call Lloyds “the world’s most boring bank”, who knew that would become a compliment. It’s taken many years for Lloyds to recover from the financial crisis, not only financially, but also on a reputational level. As we know, Lloyds made a near fatal error when it bought HBOS in the thick of the fog back in 2008. In the four years that followed, the HBOS side of the business would incur a mammoth £45 billion of loan impairments in addition to £10 billion from the Lloyds side. It was enough to bring any financial institution to its knees and Lloyds was forced into a £20 billion government bailout. The UKs First ‘SuperbankR17; Bailout aside, the purchase of HBOS propelled Lloyds to become the UK’s first ‘super bank’. Bear in mind, if the acquisition had taken place in ordinary times, such a major move would have faced tremendous opposition and likely to have been blocked altogether by competition regulators. Together, the two banks had relationships with four out of ten consumers. The timing of the deal was terrible, but the cost savings have been tremendous. The initial aim was to achieve a target of £1 billion of annual cost savings, but it wasn’t long before this was revised up to £1.5 billion, then to over £2 billion. Road to Recovery Lloyds continues to make progress with a strong start to the Group’s latest strategic plan and the planned integration of Zurich and MBNA and launch of Lloyds Bank Corporate Markets all Barclays vs Lloyds 02 www.atlanticmarkets.co.uk going to plan. The biggest appeal for the potential share buyer is the recent increase to the interim ordinary dividend. This and the overall Improved guidance offer investors some respite and positivity to look forward to. One thing that Lloyds has long been known for is its ability to keep a tight rein on costs, and that’s where a lot of the profit improvement is coming from. Lloyds has the lowest cost base of the big four banks. It also has a very strong capital position, more than double the minimum allowable level. What’s more, Lloyds has no net reliance on wholesale funding – meaning it’s self-funded. PPI Pay-outs The total PPI provisions for Lloyds now stands at a staggering £19.4bn since 2011. The compensation payments have been so vast that the Financial Times mockingly referred to Lloyds as “a cash dispenser to the people”. On the bright side, it’s a big achievement that Lloyds’ has been able to pay out billions in compensation and not only survive, but resume making good profits. Given the strength of the underlying business, it shouldn’t be too long before Lloyds switches over to being a cash dispenser to its shareholders. How They Compare Lloyds is a better run business with a far superior cost to income ratio. It is also safer with a substantially higher capital ratio. It offers investors an attractive and growing dividend yield at a modest forecast PE ratio. While its business has a narrow focus, it is the UK’s most straightforward bank. In short, it’s an income play with good upside potential. The net asset value per share is not so appealing to investors compared to Barclays. Lloyds NAV (exc intangibles) is 55.51p compared to Barclays far more appealing 318.58p. Barclays has a lot of catching up to do. Its costs are way too high, and its capital could do with a boost. Both of these points are being addressed. The recent dividend increases are now appealing to the income investor, but this has weighed on the company’s overall dividend cover. Barclays dividend cover is 1.45 compared to a healthier cover for Lloyds at 1.71. The biggest attraction of Barclays is its deep discount to net assets. The dividend cover does also offer investors the comfort. There’s a lot of potential upside that could be unlocked if the management team can run the business in a cohesive and consistent manner. For investors prepared to take a longer view, Barclays is a bargain. Barclays vs Lloyds 03
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21/4/2019
09:39		florenceorbis: One ‘hidden’ reason I think Lloyds Banking Group shares could disappoint Kevin Godbold | Sunday, 21st April, 2019 | More on: View of Canary Wharf Image source: Getty Images. There’s no shortage of bullish opinions about Lloyds Banking Group (LSE: LLOY) and one of the main arguments is that the valuation looks cheap. The dividend yield is high and, to many commentators, the bank looks like it’s poised for recovery after many troubled years since the financial crisis. However, Foolish writer Martin Bodenham punched out an article recently that added to my bearishness about Lloyds and which made me think about a ‘hidden’ reason for avoiding the shares. His article bore the headline ‘Why dividend yields don’t matter to me’ and he made a good argument for targeting total investor returns over dividend income. Two steps forward, two back Let’s face it, if you look at Lloyds’ history over the past few years total returns have taken a bashing from that wiggly share price. It looks like a strong case of two steps forward with dividend income only to have your gains wiped out later by two steps back with the share price. But when searching for potential investments, Martin considers the most important indicator to be Return on Capital (ROC) and not the dividend yield at all. His reasoning is compelling. When talking about any company, he said: “There is no better measure to demonstrate the effectiveness of its leadership team in exploiting the business’s competitive position in the market.” Indeed, a high ROC figure can lead to strong performance from a share price even though a firm’s dividend yield may be low. Instead of paying cash back to shareholders, many firms with a high ROC plough money back into their businesses to make the most of their opportunities for growth. One thing that screams out to me about Lloyds is its poor showing on all the traditional quality indicators. One popular share screening website has the ROC running at just 0.75% and the Return on Equity at 8%. The operating margin looks better at around 21%, but the bank has had to build that up from almost zero in 2013, which is another sign of the fragility of the underlying business, in my view. Commodity-style, cyclical outfits Banks tend to be highly financially geared. They have to be to turn any kind of worthwhile profit. But they are also cyclical and lacking in any meaningful competitive advantages over their peers. Banks such as Lloyds are commodity-style outfits and profitable operations depend on a number of economic variables. If we see a half-decent general economic slump at some point, my guess is that Lloyds profits, the dividend, and the shares will all plunge. And that’s what I reckon the stock market as a whole is worried about with Lloyds. After a long period of strong profits from the firm, I reckon the market is pegging and shrinking the valuation in anticipation of the next downturn. To me, the share is good for trading short term to ride the cyclical ups and downs in the share price. However, I wouldn’t try to use Lloyds as a long-term dividend-led investment and I’m not expecting a prolonged surge in the share price because of the company ‘exploiting its competitive position in the market’. Stock-Market Millionaire Full of Foolish wisdom, the free Special Free Report “10 Steps To Making A Million In The Market” lays out what we consider vital advice that can help create a possible £1 million portfolio! Take Step 6, for instance - Harness The Full Power Of Reinvested Dividends. While these cash payments may initially be small in relation to the capital value of the investment, reinvesting them into yet more shares can dramatically enhance your portfolio’s return! To see the jaw-dropping example we use to back up our case, as well as access to the remaining nine steps, click here to get your copy free of charge. Kevin Godbold has no position in any share mentioned. The Motley Fool UK has no position in any of the 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.
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