Assessing the Upcoming Dividend and Historical Performance of Barclays PLC
Barclays PLC (BCS, Financial) recently announced a dividend of $0.21 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-02-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Barclays PLC's dividend performance and assess its sustainability.
What Does Barclays PLC Do?
Barclays is a universal bank headquartered in the United Kingdom. It operates via two principal segments; U.K. (38% of profit before tax) and International (71% of PBT). In its U.K. segment, the bank provides current accounts, mortgages, savings and investment management services, credit cards, and business banking services to retail clients and small and medium-size enterprises. The international segment includes a corporate bank offering banking solutions to large corporates, a bulge-bracket global investment bank, and a credit card and payments business. In 2022, Barclays generated roughly 60% of its income from the U.K. and 25% from the United States.
A Glimpse at Barclays PLC's Dividend History
Barclays PLC has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Barclays PLC's Dividend Yield and Growth
As of today, Barclays PLC currently has a 12-month trailing dividend yield of 4.47% and a 12-month forward dividend yield of 4.08%. This suggests an expectation of a decrease in dividend payments over the next 12 months.
Based on Barclays PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Barclays PLC stock as of today is approximately 4.47%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Barclays PLC's dividend payout ratio is 0.21.
Barclays PLC's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Barclays PLC's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Barclays PLC's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Barclays PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Barclays PLC's revenue has increased by approximately 9.30% per year on average, a rate that outperforms approximately 61.54% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Barclays PLC's earnings increased by approximately 48.80% per year on average, a rate that outperforms approximately 92.86% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 18.20%, which outperforms approximately 77.88% of global competitors, further underscores its growth potential.
Next Steps for Investors
In conclusion, while Barclays PLC's dividend yield is attractive, investors should consider the company's moderate profitability rank and growth prospects when evaluating the sustainability of its dividends. The current payout ratio indicates a balanced approach to dividend distribution and earnings retention, which may support future growth. However, the growth ranks point to potential challenges ahead. As Barclays PLC navigates the evolving financial landscape, investors should keep an eye on the company's ability to maintain its dividend payments amidst these conditions. For those seeking to diversify their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener to identify promising opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
