Up 38% since 13 February, the Barclays share price is flying!

The Barclays share price has beaten the FTSE 100 index over periods ranging from one month to five years. Yet this stock still looks too low to me.

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It’s been a great year so far for most major stock markets. The US S&P 500 index has leapt by 10% in 2024, while its tech cousin, the Nasdaq Composite, is up 9.4%. Alas, the UK’s FTSE 100 is ahead just 3.2% this calendar year. However, the Barclays (LSE: BARC) share price has bucked London’s trend by surging higher since 2023.

Barclays beats the market

Then again, if we go back to mid-February, Barclays shares were looking weak. On 13 February, the share price closed at 140.48p, 9.6% above its 52-week low of 128.12p hit on 30 October.

However, since Valentine’s Day, the Blue Eagle bank’s stock has shot up. As I write — on Thursday, 4 April — this stock trades at 193.46p, valuing the group at £29.2bn. That’s a rise of 37.7% in 51 days — a pretty powerful performance for a ‘boring’ FTSE 100 stock.

Here’s how the Barclays share price has performed over six timescales:

Five days7.7%
One month13.7%
Six months25.7%
2023 to date25.5%
One year32.1%
Five years18.9%

Indeed, the bank’s stock has outperformed over all six periods, ranging from one week to five years. What’s more, it’s beaten the wider index over one and five years, with the Footsie up 4.4% and 7.1%, respectively.

We bought Barclays for income

For the record, my wife and I own these shares as part of our diversified, balanced family portfolio. We paid 154.5p a share for our holding, buying in July 2022.

To date, the value of our Barclays stake has increased by 25.3% on paper. However, we bought this stock for its ability to generate market-beating cash dividends. These totalled 6p a share for 2021, 7.25p for 2022, and 8p for 2023, with the latest instalment of 5.3p a share arriving just yesterday. Nice.

In other words, Barclays’ cash yield has increased by 25% in two years — an ideal situation for income investors like me.

We’ve no plans to sell

Despite providing us with decent paper gains and attractive dividends, we have no plans to sell our Barclays shares for the forseeable future. That’s because I still see this stock as relatively cheap, both in historical and geographical terms.

Barclays shares trade on a multiple of 7.2 times earnings, delivering an earnings yield of 13.9%. They offer a dividend yield of 4.2% a year, slightly ahead of the FTSE 100’s yearly cash yield of 4%. Also, this payout is covered 3.4 times by trailing earnings, which I regard as a healthy margin of safety.

That said, 2024 is lining up to be a tougher year for British banks than 2023. Rising consumer prices, hefty high energy bills, and rising taxes have hit household budgets hard. This may well lead to lower credit growth and rising bad debts for UK lenders.

Even so, we intend to hang tightly onto our shares, regardless of what happens to the Barclays share price in the short term!

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Cliff D’Arcy has an economic interest in Barclays shares. The Motley Fool UK has recommended Barclays. 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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