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As a long-term value and dividend investor, I seek under-priced stocks to add to my family portfolio. So, that’s why I bought Barclays (LSE: BARC) shares in mid-2022.
Barclays bounces back
During 2020/21’s Covid-19 crisis, the Blue Eagle bank’s stock plunged. On 25 September 2020, the shares closed at 91.55p. But then along came efficacious vaccines, sending global stock markets soaring once more.
By 14 January 2022, the share price closed at 215.5p. Then came a prolonged slump, with the stock losing 40% of its value to close at 129.2p on 27 October 2023. During this time of weakness, we pounced, buying Barclays shares at 154.5p in July 2022. What a great decision that turned out to be.
On Friday, 8 August, this FTSE 100 stock closed at 367.95p, valuing the group at £51.1bn. This places it 14th among the Footsie’s largest firms. Also, it’s just 2.2% below the 52-week high of 376.35p set on 31 July.
A great three years
The relief for long-term holders of Barclays stock is that it is now back to levels last seen before the worst of the global financial crisis of 2007/09. For the record, the share price is up 36.9% in 2025, 71.9% over one year, and 251% over five years. That’s a better performance than Tesla stock (down 18.6% in 2025, but up 65.4% over one year and 239.5% over five years). Wow.
As for our stake in the bank, it has surged in value by 138.2% (excluding dividends), making Barclays of our best-performing value stock in recent years. However, I don’t expect such high-flying returns over the next three years.
At current price levels, Barclays stock trades on 8.9 times trailing earnings, delivering an earnings yield of 11.2%. Meanwhile, the dividend yield — once well over 5% a year — has drifted below 2.4% a year. This is well behind the 3.3% cash yield on offer from the wider FTSE 100.
Delightful dividends
Looking at these fundamentals, the bank’s stock looks nowhere near as cheap as it was two to five years ago. After such a roaring recovery, I would no longer class Barclays as a value share. Even so, we won’t be selling our stock at these price levels, not least because of its rising dividends. Here are the bank’s dividend payouts from 2021 to 2024:
| Year | 2024 | 2023 | 2022 | 2021 |
| Total dividend | 8.4p | 8p | 7.25p | 6p |
| Yearly increase | 5.0% | 10.3% | 20.8% | N/A |
Over these four years, Barclays’ yearly dividend has jumped from 6p to 8.4p, a healthy 40% increase. Furthermore, 2025’s interim dividend of 3p is 3.4% above the 2.9p paid in 2024. And as a ‘fire and forget’ kind of investor, I’ll hang onto our stock unless or until this dividend growth peters out.
Lastly, while I don’t see this stock as a screaming bargain at current prices, it may still prove attractive to investors looking for ‘boring’, blue-chip shares to add to a widely diversified UK portfolio. That said, if the UK economy and/or its housing market takes a downturn, then this could hit the bank’s cash flow and profits from home mortgages, consumer credit, and business lending. Still, there are no signs of this happening right now, so all seems well for Barclays these days!
