The One Stock I Would Buy For 2015: Barclays PLC

If I could buy only one stock for 2015, it would be Barclays PLC (LON: BARC). Here’s why.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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. Learn More.

Investors in Barclays (LSE: BARC) (NYSE: BCS.US) have endured yet another disappointing year in 2014, with shares in the bank falling by 11% since the turn of the year. This follows gains of just 4% last year and is a long way from 2012’s superb performance that saw shares in Barclays soar by 49%.

However, 2015 could prove to be a whole lot more like the stunning returns of 2012 than the last couple of years have been. Here’s why.

Growth Potential

Barclays has stunning growth potential. For example, in the current year it is forecast to increase earnings by 23%, followed by a further rise of 27% next year. This means that its bottom line could be as much as 56% higher in 2015 than it was in 2013, which is a rapid rate of progress and appeals to an even greater extent because Barclays has remained profitable throughout the credit crunch. Certainly, its profit has been hugely volatile, but Barclays has stayed in the black while many of its peers haven’t, which makes its stunning growth prospects for the immediate future even more appealing.

Should you invest £1,000 in Barclays right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Barclays made the list?

See the 6 stocks

Margin Of Safety

Even if Barclays misses its current forecasts, its valuation indicates that there is a considerable margin of safety built into its share price. For example, while the FTSE 100 has a price to earnings (P/E) ratio of 15.5, Barclays trades on a P/E ratio of just 11.8. This indicates that there is significant scope for an upward rerating in 2015, which would be great news for investors in the bank. And, with a price to earnings growth (PEG) ratio of just 0.5, it provides further evidence that Barclays offers strong growth prospects at a very reasonable price.

Income Prospects

With interest rates set to be held at 0.5% for the immediate future, dividends are due to remain of great importance to investors. On this front, Barclays also impresses, since it is expected to pay 9.5p per share in dividends next year, which works out at a yield of 3.9% at its current share price. Furthermore, with such rapid profit growth, Barclays has room to expand its dividend payout ratio over the medium term, which could mean that there is even greater demand from income investors for its shares moving forward.

Changing Sentiment

Of course, Barclays’ main problem is poor sentiment. This results from continued allegations of wrongdoing, fines, and PPI claims. The market also appears to be rather cautious on bank stocks such as Barclays for fear of further challenges in the Eurozone, which is still flirting with a recession and deflation. As a result, sentiment in Barclays may remain relatively weak in the short run.

However, with such an attractive valuation, much of the fallout from these potential negatives appears to already be priced in. And, with Barclays offering a top notch yield next year as well as stunning growth prospects, it seems to firmly ‘tick’ the value, growth and income boxes. Certainly, it may not be the most popular of stocks but, for investors looking to ‘buy low and sell high’, Barclays could present a superb opportunity to follow that ideal.

While Barclays could prove to be a star performer in 2015, finding companies that are worth investing in can be a challenging task. That’s especially the case when you lack the time to trawl the index, as most private investors do.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Barclays. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

As gold hits $3,000, this FTSE 100 stock is primed for blast off

As Western institutions scramble to get as much gold as they can lay their hands on, Andrew Mackie believes this…

Read more »

British Isles on nautical map
Investing Articles

1 FTSE 100 stock I’ve been buying this week

The S&P 500 might be falling, but Stephen Wright has been taking advantage of an opportunity in a FTSE 100…

Read more »

Investing Articles

How to optimise an ISA and target a £2k monthly second income

Mark Hartley considers the potential benefits of various ISA products and outlines a strategy that could lead to a lucrative…

Read more »

Buffett at the BRK AGM
Investing Articles

How Warren Buffett continues to make the cash register ring like church bells!

I've been reading Warren Buffett’s latest letter to Berkshire Hathaway shareholders. As ever, it contains some great advice.

Read more »

Investing Articles

3 growth stocks for investors to add to their watchlists

When things get choppy in the stock market, share prices can fall dramatically. And this can be especially true of…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

5 US stocks making investors richer in 2025!

These five US stocks have doubled investors’ money in just 12 months! But can these gains continue throughout the rest…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Investing Articles

These 5 UK shares have made most investors poorer… for now

In the last six months, these five UK shares have crippled investment portfolios with losses of 40%-68%! But are these…

Read more »

Investing Articles

3 tempting growth stocks to consider before the Stocks and Shares ISA deadline

I’m looking to make the most of this year’s Stocks and Shares ISA allowance before the 5 April deadline. Here…

Read more »