Is the Best Time to Buy Barclays PLC (ADR) (NYSE:BCS)?

[The Motley Fool] Barclays PLC (ADR) (NYSE:BCS)(TREND ANALYSIS) Certainly, the operations of banks and other financial companies may be somewhat more difficult to understand compared to, for example, a house builder or utility company. However, in the long term, the financial services sector could be one of the most profitable places to invest and, as such, buying shares in the likes of Barclays (LSE: BARC), Investec (LSE: INVP) and Close Brothers (LSE: CBG) appears to be a shrewd move.

Unlike Investec and Close Brothers, Barclays has a rather disappointing yield at the present time. In fact, it yields just 2.7% but, looking ahead, this is all set to change. That’s because Barclays pays out just 29% of profit as a dividend which, during the credit crunch, was perhaps understandable. However, with the UK and global economies improving, Barclays may find that there is little need to retain such a large proportion of capital, thereby increasing the level of shareholder payouts over the coming years.

In addition, Barclays is expected to record a rise in earnings of 34% this year, followed by an increase of 22% next year. This should positively catalyse investor sentiment in the bank and push its rather lowly P/E ratio of 11 significantly higher over the medium to long term.

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Barclays PLC (ADR) (NYSE:BCS) stock is currently trading 13.35% below its 52-week-high, 17.86% above its 52-week-low. The 1-year stock price history is in the range of $13.27 – $18.05. Barclays PLC (ADR) (BCS) has a price to earnings ratio of 111.71 versus Financial sector average of 17.14. BCS stock price has outperformed the S&P 500 by 11.4%. The Diversified Banking Services company is currently valued at $56.94 billion and its share price closed the last trading session at $15.64. The stock has a 50-day moving average of $16.46 and a 200-day moving average of $16.22.

Barclays PLC (ADR) (BCS) current short interest stands at 3.92 million shares. It has decreased by 4% from the same period of last month. Around 1% of the company’s shares, which are float, are short sold. With a 10-days average volume of 2.76 million shares, the number of days required to cover the short positions stand at 1.5 days.

The company is expected to announce next quarter earnings on October 29, at consensus estimate of $0.39. Barclays PLC (ADR) (BCS) reported last quarter earnings on July 29. The Diversified Banking Services company announced earnings per share of $0.4 against a consensus Street estimate of $0.39, beating the average estimate by $0.01. This corresponds to an increase of $0.02 compared to the same quarter of the previous fiscal year.

Is this a Buying Opportunity? Click here for a free Trend Analysis Report

There are currently twenty-five analysts that cover Barclays PLC (ADR) stock. Of those twenty-five, eighteen have a Buy rating, five have a Hold rating and two have a Sell rating. On a consensus basis this yields to an Overweight rating. The consensus target price stands at $308.82.

A recent analyst activity consisted of Investec upgrading their Sell rating to Buy on August 25. On the date of report, the stock closed at $15.52.

Berenberg downgraded their Hold rating to Sell on May 1. On the date of report, the stock closed at $15.51.

From an income perspective, Barclays PLC (ADR) (BCS) has a dividend yield of 1.53%. The dividend has remained flat over the last 5 years and the payout ratio stands at the high level of 302.09%.

Company profile

Barclays PLC is a global financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services.

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