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The Barclays (LSE: BARC) share price keeps plodding lower. For shareholders it’s uncomfortable. But I wouldn’t be too worried. I strongly believe this 300-year-old business offers good value at this level and will deliver positive long-term returns.

Dividing opinion

Barclays chief executive Jes Staley has not yet convinced the market that he’s right to keep investment banking as a core part of the group’s business. Some investors believe it should be wound down.

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Even after a stronger first half, the investment banking business was the least profitable part of the bank, with a return on tangible equity of 9.4%. That compares to 15.1% for the UK bank and 16.7% for the Barclaycard credit card business.

A second problem is that the investment bank requires a lot of capital to operate, dampening the group’s overall returns. Costs are quite high, too.

On the other hand, a return of 9.4% is hardly a disaster, and the bank outperformed the market in areas such as Fixed Income and Currencies during the second quarter. If performance continues to improve, Mr Staley’s strategy may gain more support.

A contrarian buy?

I don’t really have enough insight into the banking industry to know whether Barclays should scale back its investment banking activities. I’m tempted to suggest that maintaining a full-service offering may help attract large corporate clients. But I don’t know for sure.

The good news is that at the current share price, I don’t think it really matters. At 140p, Barclays shares offer a 5.5% dividend yield and trade at little more than half their book value of 275p.

All of the bank’s operations are profitable and in good health. Group profits are expected to continue rising this year. In time, Mr Staley will either be proved right, or he will be forced to change his strategy.

I think the BARC share price represents a great buying opportunity for long-term investors.

Still motoring ahead

I’ve admired motor insurer Admiral Group (LSE: ADM) for many years. But over the last year or so I’ve started to wonder if the group’s growth might falter.

Today’s results suggest that growth remains strong. The Admiral share price is up by nearly 4% at the time of writing, after the company said that pre-tax profit rose by 4% to £218m during the first half of 2019.

Although boss David Stevens warned that the company was refusing to cut prices to win more customers, Admiral still reported a 5% rise in the number of UK insurance customers, which rose to 5.32m.

The company’s other operations also seem to be making progress. Its European insurance business added 209,000 customers during the half year, an increase of 21%. Meanwhile Admiral’s price comparison business — which includes — doubled its profit to £5.4m.

Profits took a £33m hit due to a recent change to the Ogden rate, which is a government-controlled interest rate that affects compensation payouts for serious injuries. However, all insurers face the same costs, so I think it’s fair to disregard this.

Today’s figures suggest to me that Admiral’s growth story remains intact. I see this as a good quality business with great income potential. Although the shares trade on 16 times forecast earnings, strong cash generation means that a 6.5% dividend yield is expected. I see the shares as a long-term buy.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral Group and 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.