Stock market crash bargain alert! I’d buy Lloyds for its 10%+ yield

first_imgStock market crash bargain alert! I’d buy Lloyds for its 10%+ yield Our 6 ‘Best Buys Now’ Shares Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Harvey Jones | Sunday, 22nd March, 2020 | More on: LLOY See all posts by Harvey Jones Following the stock market crash, the FTSE 100 is packed full of bargains. That’s hardly surprising, given that the index has lost roughly a third of its value during the coronavirus crash.This is an opportunity to buy your favourite companies at bargain prices inside a tax-free Stocks and Shares ISA, and wait for the recovery. I have favoured Lloyds Banking Group (LSE: LLOY) for some time, and now looks like a tempting entry point. Approach with caution, though. Especially these days.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The Lloyds share price has taken a battering, almost exactly halving from 63p to 31p this year, falling at a faster pace than the rest of the market.Stock market crash hits Lloyds share priceCovid-19 will exert massive pressure on LLoyds’ personal banking customers, as well as its small and medium-sized business clients.If people and firms go bust and default on their borrowings, the Lloyds share price will feel the burden. That’s why it is trading at just 9.3 times current earnings.The government’s unprecedented bailout packages should limit the damage, by keeping bankruptcies to a minimum. Slashing the base rate to just 0.1% will hurt, though, by squeezing net lending margins – the difference between what Lloyds earns from lending and pays out on savings.High yielding stockLloyds had pretty much given up on the savings market, judging by its rates, but still competes on mortgages, and will have to cut rates to do so.The banking sector tends to get hit relatively hard in a sell-off, and do relatively better in the recovery. That recovery is some way off, though. At least this is a healthcare crisis, not a banking crisis. For once, the banking sector did not bring this on themselves.Last week, broker Jefferies picked out Lloyds as the “best positioned” major UK bank in terms of its tangible book value, and said it should benefit from the Bank of England’s overhaul of lenders’ counter cyclical buffers.The authorities aren’t going to let Lloyds go under, or any bank. The risk is that it may need to sacrifice its dividend. That’s my major concern, because Lloyds stock is worth buying for the dividend alone, with an almighty yield of  10.4%.At that rate, you will double your money in seven years, even if the Lloyds share price stays marooned at 31p. Unless the dividend is cut, that is.Lloyds share price is a risky buyLloyds was struggling to make progress before the crisis, with 2019 pre-tax profits down more than a quarter to £4.4bn, primarily due an additional £2.5bn PPI bill. Its retail banking business and commercial division saw a 38% jump in bad debts to £1.3bn, following two large corporate failures. We may see more of those.Most of these risks are reflected in the low Lloyds share price and double-digit yield. You will need to grit your teeth, though, and hold on for the long term.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Addresslast_img read more

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