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Why I think 2019 could be make-or-break for the UKOG share price

Of all the possible investments Ive considered in recent years, UK Oil & Gas (LSE: UKOG) is the one that has caused me to scratch the most hairs off my head.

The so-called Gatwick Gusher, more officially known as the Horse Hill project at the Weald Basin in Surrey, has been estimated by some to hold huge reserves of hydrocarbons. Weve heard claims that there could be up to 100bn barrels of oil down there.

The UKOG share price soared on initial hopes, peaking in September 2017, but since then weve seen no actual oil production and a collapsing share price. Those who bought at the peak are today nursing an 88% loss.

Dilution

Part of the problem for early shareholders has been the dilutive effects of multiple rounds of fundraising though new equity placings, with the most recent having been only around a month ago. On 27 March, the company reported the placing of more than 300m new shares at 1.05p apiece to raise 3.5m. That was below the price on the day, and the shares have actually ticked up a bit in the following weeks, to 1.175p as I write.

My colleague G A Chester has raised some thought-provoking questions about UK Oil & Gas, including a bit of a puzzle about the institutional investors who have been snapping up these new share issues.

Loss

In the firms full-year results statement in March, I had to scroll a long way down before I found any actual figures, past reams of text telling us how fruity tomorrows jam might be.

But the bottom line was an operating loss of 3.76m, up from a loss of 2.4m a year previously. On top of that, exploration and write-off charges of 11.56m resulted in a reported pre-tax loss of 16.75m.

During the year, the company raised a total of 21.63m (net of costs) to fund its activities. At that rate, the 3.5m from the latest share placing isnt going to last long, and UKOG will surely need to seek more cash soon if it doesnt get the gusher at least flowing profitably.

Flow

If oil isnt exactly gushing at the moment, the latest production test update reported a stable rate of over 220 barrels of oil per day from the Portland reservoir at the Horse Hill oil field. And while thats at least somewhat positive, and preparations are proceeding to drill two more wells in the second quarter of 2019, its obviously nowhere near the commercial levels of production the firm will need.

Acquisition?

Meanwhile, UKOG has spent 412,500 in acquiring further highly prospective assets from Europa Oil and Gas and Union Jack Oil, and I cant help wondering if thats maybe not the best use of cash right now.

If I owned UKOG shares, Im sure Id be wanting to see the company putting 100% into getting the oil flowing from its proven reserves rather than spending more cash on more future jam potential.

If the oil does finally flow this year, UKOG shares could climb again. But I reckon we could well be looking at a knife-edge situation here.

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This overlooked FTSE 100 dividend and growth stock has been thrashing the index

Information service providerRelx(LSE: REL)is one of those stocks that it is all too easy to overlook. Its hardly a household name, but with a market cap of almost 35bn, its bigger than far better known companies such as Barclays, National Grid, Tesco, BT Group and Aviva. In fact, even I was surprised how big. Then again, I havent looked at the stock for two years.

Another good year

This morning it published a trading update that confirmed its full-year outlook is unchanged, with key business trends broadly consistent with last years. This puts Relx on course to deliver another year of underlying growth in revenue and in adjusted operating profit, together with growth in adjusted earnings per share on a constant currency basis.

Relx, formerly known as Reed Elsevier, is a global provider of information-based analytics and decision tools for professional and business customers, operating in more than 180 countries with offices in 40. It employs more than 30,000 people, roughly half in North America. This gives it a global reach and respite from Brexit uncertainties.

Organic planet

Todays update said the group continues to focus on the organic development of increasingly sophisticated information-based analytics and decision tools, and is targeting selective acquisitions to support this. It has been active on this front, completing five acquisitions totalling 236m this year alone.

Management is also being generous with shareholders, having recently completed 250m of a 600m share buy-back, with the remaining 350m to be shared out by the end of the year.

Moving on from print

Relx has risen to the challenge of developing information-based analytics tools to counter sliding revenues from its traditional print publishing business. Its share price is up 96% over five years, against growth of just 12% on the FTSE 100 over the same period.

When I looked at the stock in September 2017, I was a little wary of its low yield, then 2.6%, and high valuation of 20.9 times forecast earnings, and suggested this one might be best to buy on the dips.

Dividend surge

Today the yield is still 2.6%, covered twice, but as Kevin Godbold points out, the groupsimpressive revenue, cash flow and earnings growth have driven an almost 70% increase in dividend payments over the past five years. This comes on top of that 96% share price growth.

Last month it suffered a blow whenthe University of California cancelled its subscriptions with the companys Dutch-based Elsevier academic journals subsidiary, after itrefused to make all articles published by its authors immediately free for readers worldwide.

Open access

That contract was worth just $11m in 2018, a tiny proportion of the groups total 7.49bn revenues, the worry is that other universities will follow suit. We have seen how the drive towards free information has hit newspapers, and Relx may not be immune.

The group now trades at 18 times forecast revenues, while City analysts expect bullish earnings per share growth of 26% this year, and 7% in 2020. Id say this is either a buy, or one for your watchlist. GA Chester has no doubt. He would buy and hold it for decades.

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Should you buy Shell & BP shares after their rise?

Donald Trump has decided to remove all exemptions to Irans oil export sanctions as of 2 May. Naturally, this has caused the cost of oil to increase along with the share prices of many companies in the sector.

The dramatic rise in Royal Dutch Shell (LSE: RDSB) and BP (LSE: BP) caused the FTSE 100 to rise to a six-month high. Shell rose 2.2% whilst BP gained 2.6% as oil prices rose in anticipation of the tightened supply.

This has left many investors questioning whether these shares are worth their money or if they should wait for the prices to go down. Lets take a look at our options

Is Shell worth it?

I believe that Shell is still a brilliant investment despite the price increase. The forecast dividend yield, if you were to buy today, is 5.7%, which is certainly not a bad figure at all.

On top of this, Shell is also looking to the future. When considering environmental factors, the demand for oil and gas will eventually decrease. Thankfully, Shell is already thinking of alternatives and is working on renewable energies as we speak! This demonstrates how the company is evolving, meaning that your investment could evolve too.

We dont know if the price will come down any time soon, considering that Trumps changes could affect oil supply in the long term. I think that oil prices will only keep going up until we are certain about supply. With Shell offering such attractive dividends, I would say its worth your money.

Could BP be a safe bet?

BP has already hugely benefited from a stellar 2018, with profits doubling to hit a five-year high. However, the company is sitting on a rather intimidating 80.44 billion debt pile, which is a shocking 79% of the companys net worth. Having said this, BP is definitely one of the worlds largest oil companies and I would say that its a pretty safe investment.

BP is a long-term investment that will eventually pay dividends. I think that there is very little chance of you losing all of your money as its such a large company. Oil shares are very much a double-edged sword and its tough investing in a market that relies very much on the current price of oil. I believe that BP is worth the investment but that debt pile is worth taking into account, especially considering that it has no sustainable plans for the future.

I will be watching the oil sector closely as the impact of the rise settles down. Airlines have suffered greatly with easyJet falling a whole 4% after the news broke on Tuesday. May will be an interesting month to see exactly what impact Trumps decision has had on oil shares and whether they are truly worth the investment.

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The Royal Mail share price looks cheap, but I’d avoid it like the plague

Shares in Royal Mail (LSE: RMG) have lost more than half their value over five years, with most of the damage happening in the past 12 months.

On the upside, dividends have remained strong and progressive, rising from 21p per share in 2015 to 24p last year with the 2018 yield reaching 4.5%. But those payments are looking increasingly like they were excessive, and could have contributed to the downfall.

One problem I see as serious is Royal Mails burgeoning net debt, which stood at 470m at the halfway stage at 23 September, and that was up 23% from the figure of 382m a year previously.

That was two-and-a-half-times the companys operating profit for the half, and thats before accounting for transformation costs. Once those costs are taken into account, were looking at net debt of three times first-half operating profit.

Debt

Annualising it, that net debt figure might look reasonable to some when compared to likely full-year earnings, but Id dispute that on two counts. One is that, while similar debt levels might not provide too much of a problem for well-run companies in the prime of health, Royal Mail is far from being such a company.

Royal Mail is struggling to reform itself, and that costs money, so I reckon it should be working hard on its balance sheet.

That brings me to my second thing I reckon paying out big dividends when a company is in this situation is madness. To me it almost looks like a bit of Hey, were still paying dividends, so we must be OK bravado.

Royal Mail shares are currently trading on P/E multiples of around nine, with earnings expected to be slashed by 40% this year. But I want to see a lot more positive development before I put my bargepole away.

Woes

Marks & Spencer (LSE: MKS) has been a perennial under-performer for as long as I can remember. Whenever I open an update from M&S, I expect to read about ongoing struggles with its non-foods offerings, and Im never disappointed.

The firms big problem is that its just no good at fashion and never has been. The city centre M&S nearest me is directly opposite branches of Primark and Next, and both of those are cleaning up in their target market segments while M&S still doesnt seem to know what its segment is.

But the penny might finally be dropping for the high street giant, as its recent tie-up with Ocado confirms the companys increasing focus on what it does best.

Food

The rise of M&S Simply Food outlets is positive. The nearest to me is on a site shared with a branch of Aldi, and I think the two complement each other nicely and theyre both always busy when I visit.

On the valuation front, were looking at P/E multiples of a little over 11. Big forecast dividend yields of around 6% might make that look good, but weve already had two years of falling earnings and there are two more on the cards. I see pressure on the dividend.

Full-year results are due on 22 May, and Ill be looking for further progress in M&Ss new focus on its strengths. But until I see it translating to bottom-line improvements, Im still avoiding.

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A dirt-cheap FTSE 250 dividend stock with bigger yields than Lloyds Bank

Regular readers will know that Lloyds Banking Group and its monster dividend yield (which currently sits at a chubby 5.2%) dont move me in the slightest.

Given the probability of sinking revenues and soaring impairments as the UK drives itself off the Brexit cliff, Im not tempted to buy in for even a second. Indeed, my bearish take on the business was reinforced by the terrible first-quarter financials released by industry rivalBarclays today, numbers which underlined the intense pressures on the banking sector applied by the tough political and economic environment.

Id much rather buy FTSE 250 income hero 888 Holdings (LSE: 888) because of its superior profits outlooks for the near term and beyond. And oh yes, its forward yields soar above those of Lloyds too.

Roll the dice

888 is a great play on the online gambling explosion and latest results in March proved just why.

Adjusted pre-tax profits at the business swelled 11% in 2018 to $86.7m, thanks to the progress being made on foreign shores and particularly so in Continental Europe (excluding the UK, revenues at its core Casino and Sports divisions swelled 17% and 18% last year).

Theres plenty of evidence to suggest that the trading environment should remain conducive to more excellent profits growth looking down the line too. 888 cited recent research from H2 Gambling Capital predicting that the value of the global online gambling industry will swell from $50.8bn in 2018 to $70.3bn within the next five years, reflecting the increased use of mobile devices, better internet connectivity for users, and regulatory changes which are opening up new markets to the online operators.

And the FTSE 250 firm is well placed to capitalise on these favourable conditions by bolstering its geographic footprint. Over the past year its secured new gaming licences in Sweden, Malta and Portugal and introduced new platforms like 888Poker.it in Italy. Meanwhile, away from Europe, 888s also engaged in further acquisition activity to enhance its operations in the hot growth market of the US and rolled out new websites like 888Sport in New Jersey.

6%+ dividend yields

The impact of competitive and regulatory troubles in the UK are expected to push earnings heavily to the downside in 2019 a 24% drop is predicted by City analysts, in fact. However, the bottom line is anticipated to bounce back next year and a 10% rise is forecast.

And with 888s overseas operations creating a bright profits outlook beyond the immediate term, the number crunchers expect dividends to remain on the right side of generous. This means that dividend yields of 6.3% and 6.7% for this year and next can be enjoyed.

At current share prices, the company sports a forward P/E ratio of 12.6 times, more expensive than Lloyds but a figure I consider to be attractive value given the growth rate of the market in which it operates and the ambitious steps its taking to boost customer numbers. All things considered I reckon, unlike the banking giant, that 888 is a terrific buy right now.

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Buy-to-let? I think these 2 stocks are a better way to invest in property

I make no secret of the fact that I think fears over a depressed property market are throwing up some bargains, but Im not talking about buy-to-let. That craze is subsiding these days, and its looking far too risky to me.

No, the bargains Im seeing are in housebuilders and real estate investment trusts (REITs).

UK income

RDI Reit (LSE: RDI), formerly known as Redefine International, gave us a first-half report Thursday headlined Strong operational metrics despite headwinds.

The company, which seeks income and is focused on the UK industrial and retail sectors, reported a 3.6% decline in underlying earnings at 26.4m, with underlying EPS down 5.2% to 6.94p. I think thats pretty reasonable in the current economic climate.

Net rental income actually rose, by 0.2% on a like-for-like basis. But if 0.7m of hotel refurbishment costs are taken out, that rises to 1.9%. Occupancy rates were strong, declining only slightly from 92.1% at 3 August to 96.9% by 28 February.

Dividend

The interim dividend was cut from 6.75p per share to 4p, with the company saying full-year dividends are to be weighted towards the second half with expectation to revert to regular payout ratio alongside full-year results. Last year provided a full-year yield of 8%, and I think even half that would be reasonable in todays conditions.

All that sounds good enough, but its the balance sheet that attracts me the most. RDI reported a net asset value (NAV) per share of 204.4p, down 4.4% from 213.8p a year previously, but how does it stack up against the share price?

At 129p as I write, the shares are trading on a discount to NAV of 37%. Id probably expect a double-digit discount for a REIT these days, but that sounds like an undervaluation to me.

Venerable

Im turning now to FTSE 100 stalwart British Land Company (LSE: BLND), which splits its investments between prime London office space and UK retail and leisure property. The firms annual rental income of about 580m is part of the reason my Motley Fool colleague Roland Head chose British Land for his ISA, and with the resulting reliable dividends yielding 5% and better, I find it hard to disagree with him.

British Land shares are trading on a similar discount to NAV as RDI shares, and again, I see that as indicating undervaluation. The company seems to think so too, having completed a 200m share buy-back programme in March.

Results

Full-year results are due on 15 May, and commenting on first-half performance last November, chief executive Chris Grigg said: Our London office developments are letting up ahead of schedule and on better terms than expected. He added that demand for the highest quality London office space is expected to continue, though there could well be some Brexit uncertainty.

Im very much aware of the pressures on the retail world from the growth of online selling, but the whole of the commercial property sector looks like its in times of maximum pessimism at the moment and I reckon thats the time to buy.

I see both of these REITs as providing attractive long-term income that could be locked in now at low share valuations, with a prospect of capital growth as a bonus.

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A 5%-yielding FTSE 100 dividend stock I’d buy and hold forever

Mining stocks have a bad reputation with some investors. But if you approach this sector in the right way, I believe miners can be a good source of dividend income.

Despite environmental concerns, the world wont stop needing materials such as iron ore (for steel) and copper (for all things electrical) any time soon. These two natural resources would probably be my top picks for the 21st century, as modern infrastructure and technology simply cant be built without them.

One big digger Id buy

A company that shares this vision is FTSE 100 mining group Rio Tinto (LSE: RIO). Rio has sold its coal mines and is now focused on iron ore, copper and aluminium.

In each of these areas, the company has large, good quality assets. The benefits of this approach are clear. In 2018, Rio generated free cash flow of almost $7bn from sales of $40.5bn. That represents a free cash flow yield of 17%, which is an exceptionally good figure.

The companys profit margins are currently being boosted by strong iron ore prices and some disruption at other major producers. But chief executive JS Jacques is keeping tight control on costs and spending. Having reduced Rios debt levels to minimal levels, Mr Jacques is returning most of the companys spare cash to shareholders.

In 2018, dividends and share buybacks totalled $13.5bn, giving a total shareholder return of about 14% on the current share price.

Returns are likely to be more modest this year. But analysts still expect Rio shares to provide a dividend yield of 5.7%. I suspect more share buybacks are likely as well.

What about the risk of a crash?

Its no secret that the mining sector is heavily cyclical. Periodic downturns are a fact of life.

The sector crashed in 2015 and I suspect it will happen again at some time in the next 10 years. But I dont see this as a reason to avoid diversified miners like Rio, which are financially strong and prioritise shareholder returns.

Id be happy to buy Rio for income today. Id then plan to buy more during the next downturn, in order to lower my average purchase price and boost future returns.

I wouldnt do this

As a general rule, I stay away from smaller miners, such as Tanzanian gold firm Acacia Mining (LSE: ACA).

The biggest problem with such companies is that they tend to rely on a handful of assets, often in a single country.

This leaves them heavily exposed to political risk and operational problems. Acacia is a good example. Todays first-quarter results revealed that the firm is still no nearer to a settlement with the Tanzanian authorities relating to a major tax dispute.

In the meantime, the groups gold production fell by 13% during the first quarter, due to a ground fall and various other technical problems. Although Acacia remains profitable and may seem cheap, the eventual cost of settling with the Tanzanian government could be high. All of the firms revenue-producing mines are in Tanzania, so it cant afford to walk away.

I believe that gold miners can be a good long-term investment. But Acacia faces unknown risks and has all of its eggs in one basket. At 150p, the shares have risen by 50% from last years lows of under 100p. In my view, thats enough. Id stay away.

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Is it finally safe to buy the Tullow Oil and Premier Oil share prices?

Both Tullow Oil (LSE: TLW) and Premier Oil (LSE: PMO) came close to the edge during the oil price slump. Valued largely on their reserves, both were (and still are) heavily funded by debt, and that proved very dangerous during the crisis.

But theyre still here and are getting their debts down, albeit slowly. And Tullow has reached a milestone, with chief executive Paul McDade saying At todays AGM, the Board will be asking Tullow shareholders to approve the Groups first dividend payment since 2014.

Wow, a dividend! Now, that sounds impressive, and McDade went on to say that the firms new dividend policy is expected to deliver at least $100 million per year to shareholders. But some, including me, would question its wisdom.

3 billion!

At 31 March, Tullows net debt stood at a towering $3bn. Theres still a $1bn liquidity headroom, apparently, but how would that look should we enter a renewed oil price fall? I think thats unlikely, but just about everyone thought the last crash was unlikely (both in severity and duration) until it happened.

Ive never understood why companies carry large debts and pay dividends. To me, its just borrowing money to hand to shareholders (and paying interest on it into the bargain). Id much rather see Tullow using every spare penny to reduce that debt mountain right now.

Q1 oil production dropped a little to average 84,600 bopd due to (now resolved) technical issues. With current production around 95,000 bopd, and expected to reach 100,000 bopd, the company has revised its full-year guidance to 90,000-98,000 bopd.

Those production figures look fine, and if oil stays around todays $70+ levels, Tullow looks back on track. But Im still twitchy about that debt.

Worse debt?

In the depths of cheap oil, I plumped for Premier Oil shares. As usual, though, my timing stank and I bought in some time before the share price hit bottom and, at one point, when the shares were suspended, I was briefly down 80%. Still, approximately 3.5 years on, Im finally slightly in profit, though whether its sustainable yet is an open question.

The shares are still on a pretty low P/E ratio of only 9.4 on current year forecasts, dropping to 8.4 based on a 14% EPS rise forecast for 2020. On the face of it that looks cheap. Tullow Oil shares are more highly rated at multiples of 12.3 for this year and 13.4 next, so I think fellow Fool Peter Stephens is right to suggest Premier might be a bargain FTSE 250 stock. But again, of course, its all about the debt.

Next update

Theres an AGM day update from Premier due on 16 May but, at full-year results time in March, the company reported a 31 December net debt figure of $2.3bn. In absolute terms, thats lower than Tullows debt, but Premier has a far lower market capitalisation of approximately 860m compared to Tullows 3.36bn.

Proportionally, then, Premiers debt is a bigger worry, and that casts its lower P/E valuation in a new light and maybe its not such a bargain after all.

Ill be seriously reconsidering my investment in Premier during the course of 2019. But, for now, I think we could well see some further share price rises from both Premier and Tullow in the coming months.

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Sainsbury’s share price slumps as Asda deal is blocked. This is what I’d do now

J Sainsbury (LSE: SBRY) was dealt a blow this morning when the Competition and Markets Authority (CMA) announced it had blocked the companys planned merger with Asda. The shares slumped over 6% in early trading.

Here, Ill give my view on Sainsburys prospects as a standalone business, and whether Id personally buy, sell, or hold the shares today.

Ups and downs

It was a year ago when Sainsburys announced it had agreed a deal with Asda to combine their businesses, subject to regulatory approval. The merger would have created a group that rivalled UK number one Tescoon market share. And it would have enjoyed all the benefits of increased economies of scale.

Sainsburys shares climbed strongly following the announcement of the deal, reaching a high of over 340p last summer. I had my doubts at the time whether the CMA would approve the move, or that if it did, whether it would impose a store disposal programme so onerous that the two companies would drop the plan.

The CMA announced its preliminary findings in February. It said a merger could lead to a substantial lessening of competition,and added, it is likely to be difficult for the companies to address the concerns it has identified. Sainsburys shares crashed on the news.

Todays final CMA report confirmed its preliminary assessment. It said the merger would lead to increased prices in stores, online and at many petrol stations across the UK We have concluded that there is no effective way of addressing our concerns, other than to block the merger.

Sainsburys said that, as a result, it and Asda have mutually agreed to terminate the transaction.

Anaemic outlook

Having spent the past year explaining why the deal with Asda was so necessary, Sainsburys chief executive Mike Coupe is now under pressure to persuade a sceptical market that the company can thrive without the merger. Its a tall order, in my view. The business has been struggling, and the groups operating profit margin is the lowest in the sector.

After three consecutive years of dividend cuts, the retailer did at least maintain last years payout at the same level as the prior year (despite a further fall in earnings). However, with the 4.7% yield at the current share price (215p) being little better than that available from a FTSE 100tracker, and the supermarket forecast to produce only anaemic earnings and dividend growth, it seems theres little potential reward for investors taking on the single-company risk of Sainsburys.

Checkout

When it announced its plan to merge with Asda last year, Coupe was caught on camera singing were in the money, while waiting to be interviewed about the deal for ITV News. As things have turned out, I dont think he, or investors at todays share price, will be in the money at least not to any significantly greater extent than holders of a far less risky FTSE 100 tracker.

Existing Sainsburys shareholders may be inclined to continue holding to see if Coupe has a Plan B or, indeed, if he survives at all.

Personally, on a risk/reward basis, I see this as a situation in which theres merit in selling the stock, and buying into one with a more promising outlook or a simple FTSE 100 tracker.

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Why I’d still buy the Barclays share price after today’s bad news

We all hoped for more from Barclays (LSE: BARC) first-quarter results today but, once again, it wasnt to be. Its a familiar feeling.

As Rupert Hargreaves recently pointed out, the FTSE 100 high street banks share price has gone nowhere for a decade. This morning. its down 2%, as underlying profit before tax fell almost 12% to 1.5bn. That wasnt the only bad news lurking in todays results.

Tangible disappointment

Income fell 2% whileearnings per share (EPS) dipped 11.2% to 6.3p year-on-year. There was also a 33% year-on-year increase in credit impairment charges to 400m. Return on tangible equity fell 12.7%, to 9.6%.

Management said the banks financial targets remain unchanged but warned of a challenging income environment and noted if this persisted for the remainder of the year, it would be forced to cut more costs.

Improved conduct

But there was some better news too. Barclays turned a pre-tax profit loss of 236m one year ago into a 1.48bn gain. But that was down to fewer bad debts, restructuring expenses and litigation and conduct charges, rather than improved underlying trading.

Barclays UK did relatively well, as profit before tax tripled to 600m. But strip out litigation and conduct charges and the rise was only 1%. Income actually declined 1% and margins slipped from 3.27% to 3.18%, which is worrying even if it was partially offset by sustainable growth in mortgages and deposits.

Investment bank disappoints

The big disappointment was corporate and investment bank Barclays International, with profit before tax down 21% to 1.1bn. That was due to reduced client activity, lower volatility and a smaller banking fee pool across the industry. These are tough times generally for investment bankers, although Barclays could at least claim a growing share of a shrinking fees pool.

This will embolden activist investor Edward Bramson, who reckons Barclays should take the knife to its investment banking division to focus on more profitable areas. Is this now a vanity operation that Barclays can no longer afford?

I can see why chief executive Jes Staley remains faithful as Barclays would be a diminished entity without it. Investment banking is still the glamour end of the industry, but carries a high price tag. However, while investment banking, from equities and corporate lending dropped sharply, at least revenues from fixed income grew 4%.

Bargain price

The good news is Barclays can respond to any further income slowdown by squeezing costs further. Bad debts credit impairments actually fell 5% in the UK due to a reduced risk appetite and continued benign economic environment.

Barclays has underperformed the rest of the sector over the last year, its stock dropping 22%, against a dip of 2% for Lloyds Banking Group and 7% at Royal Bank of Scotland. However, its now cheaper than both, with a price-to-book value of 0.4, against RBS at 0.7 and Lloyds at 0.9. Be warned: some would avoid the banking sector like the plague.

Others will be buoyed by todays pledge to maintain the banks capital returns policy, with a progressive ordinary dividendsupplemented by share buybacks when appropriate.

A forecast yield of 4.5%, covered three times, is reward while you wait for Barclays to get its act together. History suggests that could take time, though.

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Femi Ogunshakin Managing Director
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