Barclays’ (LSE:BARC) shares have delivered a rich and reliable stream of dividends over the last five years.
Yields have consistently topped the FTSE 100 long-term average of 3%-4%. And dividends have steadily risen over the period to help investors grow their passive income ahead of inflation, as this table shows:
| Year | Dividend per share |
|---|---|
| 2025 | 5.6p |
| 2024 | 5.5p |
| 2023 | 5.3p |
| 2022 | 5p |
| 2021 | 4p |
So how much in dividends might Barclays’ shares generate over the short-to-medium term? And should I consider buying the Footsie bank today?
A £1,324 income
Speculation of interest rate cuts in the UK and US has propelled Barclays’ share price 36% higher over the last year. Dividend yields have subsequently fallen, but they’re still sitting at an attractive:
- 3.4% for 2026.
- 4.2% for next year.
- 5.1% for 2028.
Based on these projections, someone investing £10,000 in the bank today would enjoy dividends of roughly £340 this year, £434 in 2027, and £549 the year after. That’s assuming all dividends are reinvested to generate even more passive income.
Cumulative dividends over the three years would total a healthy £1,324. But dividends are never guaranteed, and especially in the current uncertain economic climate. How robust are these projections then?
Good signs
Things are looking good based on dividend cover. Between now and 2028, predicted payouts for Barclays’ shareholders are covered between 3.2 times and 3.4 times by expected earnings. That’s miles above the widely-regarded ‘safety’ minimum of 2.
The bank’s strong balance sheet also suggests it’s in good shape to meet near-term dividend forecasts. It’s CET1 capital ratio was a robust 14.1% as of April, which is also supporting a new £500m share buyback scheme.
Barclays has many qualities that make it one of the FTSE 100’s most reliable dividend shares. Essential everyday products such as current accounts and credit cards help provide reliable cash flows. It’s also well diversified by product range, and with retail operations in the UK and US too, it’s better placed to absorb specific risks and keep paying dividends.
Are Barclays’ shares a buy?
Though things look good for dividends, I’m not as positive for Barclays’ share price. In fact, I think the bank’s in danger of a sharp correction.
Its price-to-earnings (P/E) ratio has risen to 8.7 times, above the 10-year average. Does this reflect the threat of surging credit impairments as the Iran war raises inflation and hits economic growth? I’m not so sure.
Revenues could also slump across its retail operations, and a potential stock market correction could spell serious trouble for its investment bank. The vast size of Barclays’ investment bank leaves it especially exposed to a meltdown on financial markets too.
To top things off, Barclays is under increasing strain to grow profits as challenger banks expand their services. Even as interest rates rise to boost margins, traditional banks have a hard fight to grow income and profits in this tough and competitive landscape.
So will I buy Barclays‘ shares for my portfolio? No. I’d rather find other stocks to buy for dividends today.
Should you invest £5,000 in Barclays Plc right now?
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Royston Wild does not hold any positions in the companies mentioned.
