Barclays Plc (NYSE: BCS)

Sector: Financial Services Industry: Banks - Diversified CIK: 0000312069
Market Cap 106.27 Bn
P/B 1.01
P/E 10.96
P/S 2.70
ROIC (Qtr) 0.85
Div Yield % 1.66
Rev 1y % (Qtr) 9.86
Total Debt (Qtr) 917.73 Bn
Debt/Equity (Qtr) 8.73
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About

Barclays PLC, known by its stock symbol BCS, is a prominent player in the financial sector, offering an extensive range of services to various clients, from individuals and small businesses to large corporations and governments. With a presence in over 40 countries, Barclays has established itself as one of the world's leading financial institutions, with a history that spans over three centuries, back to 1690. Barclays operates through four primary segments: Consumer Banking, Corporate Banking, Investment Banking, and Wealth and Investment Management....

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Investment thesis

Bull case

  • Robust free cash flow of 22.81B exceeds capital expenditure of 2.51B by 9.08x, indicating strong organic growth funding capability.
  • Operating cash flow of 25.32B provides strong 21.27x coverage of tax liabilities 1.19B, showing excellent fiscal position.
  • Cash reserves of 310.48B provide comfortable 260.79x coverage of tax obligations 1.19B, showing strong fiscal management.
  • Retained earnings of 80.07B represent substantial 0.76x of equity 105.11B, indicating strong internal capital generation.
  • Strong tangible asset base of 2075.51B provides 185.40x coverage of intangibles 11.19B, indicating robust asset quality.

Bear case

  • Operating cash flow of 25.32B provides thin coverage of dividend payments of (3.04B) with a -8.32 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 25.32B shows concerning coverage of minority interest expenses of (1.40B), which is -18.05x, suggesting complex corporate structure risks.
  • Operating cash flow of 25.32B is outpaced by equity issuance of (3.25B) (-7.79 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 23.98B, indicating potential underinvestment in innovation relative to administrative overhead.
  • Deposit liabilities of 791.37B significantly exceed cash reserves of 310.48B, which is 2.55x, indicating potential liquidity risk in stress scenarios.

Breakdown of Revenue (2018)

Breakdown of Revenue (2018)

Peer comparison

Companies in the Banks - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 JPM Jpmorgan Chase & Co 1,043.32 Bn 33.97 9.59 942.38 Bn
2 BAC Bank Of America Corp /De/ 532.79 Bn 28.35 6.13 708.27 Bn
3 WFC Wells Fargo & Company/Mn 446.49 Bn 124.86 10.43 408.42 Bn
4 C Citigroup Inc 376.35 Bn 51.48 4.87 720.33 Bn
5 RY Royal Bank Of Canada 244.65 Bn 16.82 5.14 9.97 Bn
6 TD Toronto Dominion Bank 165.03 Bn 11.57 3.41 7.67 Bn
7 BK Bank of New York Mellon Corp 143.13 Bn 63.87 9.95 51.52 Bn
8 BMO Bank Of Montreal /Can/ 107.49 Bn 17.28 4.15 179.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.49 0.22
EV to Cash from Ops. EV/CFO 40.58 241.80
EV to Debt EV to Debt 1.12 2.53
EV to EBIT EV/EBIT 83.59 33.73
EV to EBITDA EV/EBITDA 57.74 25.98
EV to Free Cash Flow [EV/FCF] EV/FCF 45.05 245.05
EV to Market Cap EV to Market Cap 9.67 1.98
EV to Revenue EV/Rev 26.10 9.02
Price to Book Value [P/B] P/B 1.01 3.87
Price to Earnings [P/E] P/E 10.96 33.57
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 4.31 2.37
Dividend Payout Ratio % Div Payout % (Qtr) 18.20 29.28
Dividend per Basic Share Div per Share (Qtr) 0.43 2.04
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 8.91 15.72
Interest Coverage Interest Coverage 0.00 0.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % -27.68 -5.81
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.17 -8.06
Dividend Growth (1y) % Div 1y % (Qtr) 3.37 -10.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 22.94 32.26
EBITDA Growth (1y) % EBITDA Growth (1y) % 20.80 22.90
EBIT Growth (1y) % EBIT 1y % (Qtr) 22.05 30.58
EBT Growth (1y) % EBT 1y % (Qtr) 22.05 30.58
EPS Growth (1y) % EPS 1y % (Qtr) 31.53 38.83
FCF Growth (1y) % FCF Growth (1y) % 229.46 235.05
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 17.60 9.67
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.03
Cash Payout Ratio Cash Payout Ratio 0.11 0.17
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 8.73 3.24
Interest Cover Ratio Interest Cover Ratio 0.00 0.00
Times Interest Earned Times Interest Earned 0.00 0.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 37.30 38.15
EBIT Margin % EBIT Margin % (Qtr) 23.10 38.03
EBT Margin % EBT Margin % (Qtr) 31.22 33.01
Gross Margin % Gross Margin % (Qtr) 100.00 98.96
Net Profit Margin % Net Margin % (Qtr) 24.60 26.44