But on balance I’d still rather buy other UK shares for dividend income today. That said, Lloyds faces increasingly choppy waters that might threaten dividend projections next year and how to trade on the hong kong stock exchange beyond, and keep its share price locked in its recent downtrend. Lloyds’ share price is largely unchanged on a 12-month basis. But growing fears over the state of the UK economy have caused the bank to sink by almost a fifth since the beginning of February.
Data preferences
First it’s worth considering how realistic current dividend forecasts are. Shareholder payouts have risen strongly from the depths of the Covid-19 pandemic, and City analysts expect them to appreciate again to 2.8p per share in 2023 from 2.4p last year. It seems as if current dividend estimates look quite realistic, too. This provides a wide margin of error in case earnings disappoint.
Does Lloyds Banking Group have an increasing dividend?
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After a 540% rise, could this penny share keep going?
It set aside £688m in the axes broker three months to September alone, taking the total to well above £1bn. However, I’m not convinced that the bank will continue growing strongly beyond next year. Its profits are still closely tied to the performance of the UK economy. And with some economists predicting a prolonged downturn until well into 2024, things could get bumpy.
Using the table above, I can see that if I bought Lloyds shares today at 42p, I could expect to receive a dividend yield of 5.5% this year. Although Lloyds has a reputation as a dividend stock, its ability to pay dividends can be affected by economic conditions. For example, the bank’s dividend was cut in 2020 when the pandemic struck. And this could help stabilise How to buy bitcoin gold earnings during these tough times.
In fact, some analysts believe the bank’s strong capital position may lead it to launch additional share buybacks. The sudden outbreak of Covid-19 — and the colossal impact this had on shareholder payouts across the London Stock Exchange — is evidence of this. For 2023, the Black Horse bank’s yield sits at 5.9%, well above the 3.7% average for FTSE index shares. You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. For reference, in March 2020, the PRA told major UK banks to suspend the payment of dividends and buybacks until the close of 2020.
- Lloyds understands the importance of paying big dividends to its shareholders.
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- Dividend yield does not apply to Lloyds Banking Group, as no dividend payments are made.
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- Lloyds Banking Group pays annually dividends to shareholders.
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The Lloyds share price trades at 45.25 pence as of 19th August 2022. The London Stock Exchange does not disclose whether a trade is a buy or a sell so this data is estimated based on the trade price received and the LSE-quoted mid-price at the point the trade is placed. It should only be considered an indication and not a recommendation. Dividendpedia.com is not responsible for the displayed data, its accuracy, and its update.