The ShareProphets share tips of the year 2020 - No 2 a buy from Malcolm Stacey
By Tom Winnifrith | Wednesday 25 December 2019
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Over the next week or so each of the team will serve up two share tips (buys or sells). I will serve up 4. That makes 20 in total. Enjoy our share tips of the year 2020. Second up is a BUY from Malcolm Stacey who owns shares in the company below..
Hello Share Tasters. That up and down bank Lloyds (LLOY) is on a bit of a roll at the moment. A few months back it took a nasty tumble when it was discovered that a last minute rush by compensation seekers was heavier than expected. But it’s made up all the lost ground pretty quickly.
What’s sometimes forgotten is that there can be no more PPI claims because the August deadline is well and truly past. So after a few more trading reports, we can expect profits to rise, perhaps even handsomely.
What puts Lloyds head of other banks is the big dividend. Currently it’s just over 5% And It’s been really handy to keep getting the payouts, especially as I still hold so many Lloyds shares. The City seems to think the divi will keep on rising, possibly to 5.8% in 2020.
One of the things about companies which keep disappointing on the share price front is that eventually there comes a time when obstacles which prevent the breaking of tough upper barriers, may one day topple. And once a barrier is down the rise can be quite spectacular.
The low interest rate has not helped, but that won’t last for ever and then Lloyds can earn more for its lending out. . Also Brexit has curbed all UK bank share prices.That’s mainly because of the poorly pound. But once the world realises that Blighty is still going to be a big economic force outside Europe, the the pound should rise and so might the value of LLoyds’ assets.
The PE as I pen this New Year tip is only 11.3.The tasty yield I mentioned is paid quarterly, which is nice. I have many friends who would not touch any bank with a bargepole. But there is such a thing as unreasonable prejudice. And I try to avoid that.
We all do in the Punter’s Return.
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