The Motley Fool

Super Growth Prospects Make Me Super Bullish On Lloyds Banking Group PLC

Lloyds (LSE: LLOY) (NYSE: LYG.US) is a company that, at times over the past five years, I never thought I would ever describe as a growth stock.

This is because for most of this period, the outlook has seemed dire. Indeed, the credit crunch has hit the UK banking sector particularly hard and has left longstanding Lloyds shareholders like me with little in the way hope for higher profits.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

However, what a difference a few years makes! Lloyds is now, in my view, one of the most exciting growth stocks around and, as such, I’m thinking of increasing my stake in the bank.

Indeed, earnings growth prospects point to far better times ahead for Lloyds, with the market expecting earnings per share (EPS) growth of 32% in 2014, with EPS expected to be as high as 6.75p per share.

To put this into perspective versus other growth stocks, ARM Holdings (which is often viewed as one of the most prominent UK growth stocks) is expected to grow EPS by 22% in 2014. This is roughly two-thirds of the growth expected to be generated by Lloyds, meaning that Lloyds has to be viewed as a true growth stock by the market.

Of course, as my fellow Fools will doubtless be well aware, growth stock status can mean improved sentiment and greater interest in the company. In other words, shares in growth stocks (especially during times of low growth such as the present time) can trade on generous premiums simply because they are delivering relatively high levels of growth.

In addition to the impressive growth prospects, I’m attracted to Lloyds because it has a relatively high beta. This means that shares should beat the index on the way up and fall faster on the way down, meaning my bullish outlook on the UK stock market would be well-matched with shares in Lloyds.

Of course, if the stock market falls then Lloyds should (in theory) underperform the wider index but I feel that even if there are short term dips, Lloyds remains well placed to deliver index-beating earnings growth. In turn, I think that the positive impact on the share price should come through over the medium to long term.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

> Peter owns shares in Lloyds.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.