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Lloyds Shares – Dividend, Price Forecast, & Bank Industry Data

Sam Boughedda trader
Updated 18 Mar 2024

Headquartered in London, Lloyds Banking Group (LON:LLOY) stands as a formidable presence in the UK's financial landscape, tracing its roots back to centuries of banking heritage. With operations extending across the UK and boasting a significant market presence, Lloyds is renowned for offering a wide array of financial services, including retail and commercial banking, insurance, and wealth management.

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In its retail segment, Lloyds provides a broad range of financial products and services to personal and small business customers, including current accounts, savings products, mortgages, motor finance, and unsecured consumer lending.

The bank's commercial banking segment offers a variety of products and services, including lending, transactional banking, working capital management, risk management, and debt capital markets services.

Finally, its insurance, pensions, and investments segment is dedicated to providing a range of financial solutions aimed at addressing the insurance and wealth management needs of its customers.

Lloyds, A Brief History

Lloyds Banking Group, a titan in the British financial sector, has a storied history that dates back to the late 17th century. The company traces its origins to 1765 when Taylors & Lloyds opened as a private bank in Birmingham. It was founded by John Taylor, Sampson Lloyd and their two sons, before the association with the Taylor family ended in 1852, and the name was changed to Lloyds & Company.

Over the years, individual banking entities evolved and merged, eventually culminating in the formation of Lloyds Bank.

Lloyds Bank's growth and influence expanded through strategic acquisitions, including the notable purchase of the Trustee Savings Bank in the 1990s, propelling the bank into a prominent position within the UK's retail banking landscape. In 2009, following significant turbulence in the banking sector (Global Financial Crisis), Lloyds TSB acquired HBOS. The new company, Lloyds Banking Group, became the largest retail bank in the UK at the time. 

Lloyds Share Price & Dividend 

Much like many other stocks in the UK banking sector, the upside in Lloyds's share price has been almost non-existent for a number of years. While the stock is up from its pandemic lows, it has failed to push higher since the beginning of 2022. Given that Lloyds is the biggest mortgage lender in the UK, the slump in the housing sector has also weighed on its share price. 

If the share price is to push higher, the economic conditions and housing market may need to improve first.  Lloyds does pay dividends, generally twice per year. Its current dividend yield is over 5%. 

Lloyds EPS and Revenue Breakdown 2020-2023

LloydsAnnual EPSAnnual Revenue
20207.5p£15.13 billion
20217.5p£16.32 billion
20227.3p£18.21 billion
20237.6p£19.22 billion

Banking Industry Comparison

Other Lloyds Bank News

Lloyds Share Price Forecast – A Buy Or Sell?

In a recent research note, Bank of America downgraded Lloyds Banking to Neutral from Buy, assigning the stock a new price target of 52p, down from 59p per share. Analysts at the bank believe Lloyds is the most exposed to the recently announced review of motor finance lending by the UK's Financial Conduct Authority. Furthermore, they believe Lloyds' margins could remain under pressure.

On the other hand, in late 2023, Morgan Stanley raised its rating for Lloyds Banking to Overweight from Equal Weight, increasing its price target for the stock to 64p from 60p per share. Analysts at Morgan Stanley highlighted Lloyds' cash-generative business, more seasoned book, and over 20% market share as reasons for the upgrade. In addition, they said that even though there are higher costs, a steeper yield curve, stronger mortgage flows, and lower provisions propel 13.5% return on equity expectations for 2024.

Are Lloyds shares a good buy? The current Lloyds stock price and Its healthy dividend yield mean that many investors will find the stock attractive to hold over the long term. However, due to the current headwinds, it is important to remain cautious. 

Who Should Buy Lloyds Shares

Given that any investment in Lloyds Banking may take a while to see any real significant upside in the share price,  it's important for investors to assess whether investing in the stock and sector fits their investing goals and characteristics. 

As always, risk tolerance is a key factor to consider.Lloyds Banking Group's shares may be more suitable for investors with a moderate risk tolerance. Lloyds' performance is impacted by economic conditions and regulatory changes. Investors comfortable with the inherent risks associated with the financial industry may find Lloyds' shares align with their risk tolerance.

As previously mentioned, Lloyds pays dividends, so for those seeking to boost their dividend payments, it could be a stock to consider. Investors might find Lloyds' shares attractive due to the bank's track record of dividend distributions. 

Finally, individuals with a long-term investment horizon may be more suited to investing in Lloyds shares. If you are asking yourself whether Llloyds shares are a good buy, then you will have to ensure that you are happy with the dividend, and being a dividend investor more than growth. UK bank stocks have in general have seen very little growth in recent times, so those investing in Lloyds should keep that at the forefront of thoughts.

Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.