Share with Lloyds (LSE: LLOY) It has a recent solid performance. In the last 12 months, Lloyds’ share price has risen 50%.
Even after that increase, I will buy Lloyds shares for my portfolio. There are three reasons here – and one risk I see.
First-class high street position
Lloyds itself has the famous brand name and the iconic black horse logo.Not only that, the group owns other banking brands with regional strengths such as: Halifax And Bank of scotland..
This means that the company is in a good position to continue to attract new businesses in the future. With a large branch network, a growing online presence and a market-leading position in the mortgage market, Lloyds considers it an asset to stand out in the minds of its clients. It should help the company continue to generate significant income and profits in the future.
Clear strategic focus
Banking operations can be very profitable if carried out efficiently and carefully. History has shown that many banks stumble by engaging in exotic markets and high investments without properly assessing risk. It caused the last financial crisis, but it also caused the collapse of many banks over the last century.
Lloyds has a very clear strategy. I think it will help boost Lloyds’ stock price. It has a head-on focus on its domestic market. We also specialize in retail banking and commercial banking.So, for example, there is no exposure of rival investment banks Barclays, Or the global presence of UK listed banks HSBC And Standard chartered..
For example, if other markets outperform the UK, it risks lowering profits. But it also reduces risk in my view by making the entire business understandable and manageable. On top of that, it makes sense to focus on British banking as a way to take advantage of its strong position in this market.
Impact of dividends on Lloyds’ stock price
The company has recovered its dividend. It’s still constrained by its regulators regarding the amount it can pay, but Lloyds is currently paying the maximum amount it can.It also shows We plan to return to the progressive dividend policy..
On the other hand, the quick ratio of the company is 16.7%, which is much higher than the target of about 12.5%. In layman’s terms, it means that the pile of cash it can use to help fund future dividends is growing.
I think it will help boost Lloyds’ stock price as dividends increase. So I still buy bank stock today for both income and growth potential.
Lloyds stock price risk
However, all stocks carry risks, and this also applies to Lloyds.
For example, large exposure to the UK housing market could be positive at this time. However, if the housing market is sluggish, banks can make large provisions for bad debts. It can hurt both profits and profits.
My next move
I already have Lloyds in my portfolio.But i We continue to see it as an attractive investment opportunity At the current price. I would like to consider adding Lloyds shares to my holdings.
Christopher Ann It owns shares in Lloyds Banking Group and Standard Chartered. Motley Fool UK recommends Barclays, HSBC Holdings, Lloyds Banking Group and Standard Chartered Bank. The views expressed about the companies in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, Better investors than us.
Lloyds’ stock price is up 50%. I will still buy.
Source link Lloyds’ stock price is up 50%. I will still buy.