I’m a huge fan of Lloyds (LSE: LLOY) shares. Since I bought them in 2023 I’ve enjoyed bags of growth, and heaps of dividends too. The FTSE 100-listed high street bank is regularly one of the most traded UK stocks of all. But right now its popularity is off the chart.
According to online platform AJ Bell, it’s currently the most bought stock of all. That’s not so unusual, but the margin of victory is. It makes up a staggering 15.91% of buyers on the platform. The second-most-bought stock, Nasdaq-listed AI play Micron Technology, makes up just 2.18% of purchases. So how come Lloyds is suddenly smashing it?
Why is this stock in demand?
I instinctively checked out its latest results, but I didn’t get my answer there. Q1 figures landed a month ago on 29 April. They showed a pretty decent start to 2026, with underlying profit up 31% to £2bn, slightly ahead of expectations.
Lloyds also continued its £1.75bn share buyback programme, purchasing £700m of shares during the quarter. Yet the market response was flat on the day. Why the delayed reaction?
I was wondering if those buybacks had anything to do with it. Lloyds made a big purchase of its own stock on Thursday (28 May). It bought 7.746m shares at around 101p each. Total cost: £7.8m. But it bought them from Goldman Sachs, not AJ Bell.
It may just be one of those things. The last week was pretty good for Lloyds shares, they climbed 2.93%. That compares to growth of just 0.18% across the FTSE 100. However, 21 stocks did better, so I’ll just have to throw up my hands and say I can’t explain the sudden rush. I’ll move onto my next question: were people right to buy Lloyds?
Should you buy it too?
I’m a fan of FTSE 100 banks generally. In fact I’ve bought two this month, but neither were Lloyds.
Instead, I went for HSBC Holdings and NatWest. Mostly because I didn’t hold them, and wanted to diversify. Also because they were cheaper and offered higher yields. But the main driver was that both had dipped around 5% after publishing disappointing Q1 results, reducing their valuations and reducing their dividend yields. Both have jumped since I bought them.
| Trailing P/E | Trailing yield | |
| Barclays | 10.33 | 1.88% |
| HSBC | 15.31 | 4.1% |
| Lloyds | 14.45 | 3.59% |
| NatWest | 8.68 | 5.47% |
Lloyds faces challenges right now. It’s a UK-focused bank, and the domestic economy is struggling. This also limits its opportunity for finding new sources of business. I bet the board can’t help looking enviously at Barclays’ US investment banking operations, and HSBC’s massive opportunity in China.
Yet I still think Lloyds is a brilliant portfolio building block for investors wanting growth and income. And while the price-to-earnings ratio is higher than it was at 14.5, on a forward basis it’s just 10.1. The yield is forecast to hit 4.25% this year, then 5% in 2027.
I can see why investors sometimes go a little crazy about a long-term opportunity like this one, and think Lloyd shares are worth considering today. Sometimes it’s okay to follow the crowd.
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Harvey Jones owns shares in Lloyds Banking Group, HSBC Holdings and NatWest Group.
