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Is the Lloyds share price really, finally, as low as it can go?

I’ve written about Lloyds Banking Group (LSE: LLOY) a lot. And I have suggested before that the Lloyds share price has fallen as far is it will go. Maybe even more than once.

As a Lloyds shareholder, I must admit that my track record with it has not been stellar. I bought Lloyds shares in September 2015, at 76p. I thought the price was cheap at the time, after the bank’s impressive recovery from the banking crisis.

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Then things started going wrong as the Brexit result hit the banking sector badly. And the government’s repeated failures just dragged it on and on. Leaving without a trade deal? Recession and then years of slow growth? Slowdown in the mortgage market? All those potential outcomes would hurt the banks. And the prospect of them certainly hurt the Lloyds share price.

But we continued to see rising earnings and a nicely progressive dividend. And by 2018, the dividend yield had reached a very tasty 6.2%. I was disappointed by the languishing share price, but I took comfort in seeing my nice fat dividends rolling in every six months.

Lloyds share price crash

Now Covid-19 has struck, and Lloyds’ dividends have been suspended along with those of the rest of the banks. And the Lloyds share price has been pummelled. At the time of writing, it’s below 30p.

Looking back, what should I have done differently, and what should I do now?

I re-examine my share purchases regularly, as I think all investors should. And if one is turning bad, or the reasons I bought no longer apply or were simply wrong, then maybe it’s time to sell. I don’t worry every time the Lloyds share price takes a dip. Instead, I re-evaluate my holding whenever there’s any new information.

Keep on top of the news

That might be a company report, it might be an update on the housing market, or anything that affects the banks. Many times during the tedious Brexit process, it was the government’s latest parliamentary failure.

Every time, I weighed up my thoughts about Lloyds’ then valuation and its long-term prospects. Whenever something pushed the Lloyds share price down a bit further, I concluded that there was a rational reason for the fall. But I also reckoned that the sell-off was overdone, and that it was definitely not time to sell.

Still a share to buy

Every time I’ve evaluated Lloyds over the five years since I bought, I’ve always seen the shares as a buy. So what now, at 30p per share and no dividend?

As my Motley Fool colleague Harvey Jones has pointed out, the banks are in far better shape today than they were before the financial crash. Instead of being recklessly overstretched, their balance sheets are now models of prudential management. Coming into the pandemic crisis, they looked better prepared for a downturn than they’ve been for a generation.

And, after another re-examination, I still see the Lloyds share price as tempting and I want to buy more. What about my 60% loss so far? Pah, it hasn’t even been five years yet! I’m in it for the long term.

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Alan Oscroft owns shares of Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. 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.