In my lifetime as an investor, there have been four major peaks for the Lloyds Banking Group (LSE: LLOY) share price.
Lively Lloyds
The first two peaks came during the stock-market bubble of the late 1990s, with the shares surging in spring 1998 and spring 1999. When the dotcom bubble burst, share prices tumbled and Lloyds stock duly followed suit.
After making a comeback up to spring 2002, Lloyds shares plunged again. Finally, after peaking in spring 2007, the stock collapsed spectacularly. (What is it about the Lloyds share price and spring crashes, I wonder?)
From 2007 to 2020, owning a stake in the Black Horse bank became reliably risky. The share price was wildly volatile during this period, making it harder for long-term investors to make consistent profits.
A new beginning?
During the Covid-19 crisis of 2020/21, Lloyds shares collapsed to a low of 23.59p in September 2020, with capitalism cracking under the coronavirus threat. How I wish I’d bought this stock during those troubled times. Instead, my family portfolio bought Lloyds stock in mid-2022, paying 43.5p a share.
After so many false dawns for shareholders, it seems like the shares have entered a new, less volatile era. As I write, they stand at 105.43p, valuing this British business at £61.4bn. Of course, the stock still moves up and down — for example, from a 52-week low of 72.85p on 2 July 2025 to a 52-week high of 114.6p on 4 February 2026.
Boring business?
As for my family’s stake, it has leapt in value by 142.4% in four years. This is an outstanding return from what I once considered a ‘boring, old-economy’ stock.
However, this isn’t the end of our story, because we have reinvested our cash dividends into buying yet more Lloyds stock. This has turbo-boosted our current (and future) returns.
That said, I expect modest yearly returns from Lloyds shares going forward. The rising share price has pushed down the dividend yield to 3.5% a year. Though pretty decent, this is not much higher than the 3.1% yearly cash yield from the FTSE 100 index.
Likewise, the shares are now valued at 13.7 times trailing earnings, delivering an earnings yield of 7.3% a year. Thus, the dividend payout is covered a healthy 2.1 times by historic earnings. This indicates that Lloyds may continue to lift its cash distributions for years to come.
In summary
Lloyds shares are up 38% over one year and 127.4% over five years, excluding dividends. Alas, I don’t expect such sparkling returns over the next half-decade.
For sure, there will be bumps in the road ahead for Lloyds, its shares, and their owners. As the UK’s largest mortgage lender, the group is heavily exposed to the housing market — which has weakened over the last 12 months. Also, the cost-of-living crisis continues, with bad debts and loan losses expected to creep up as real household incomes decline.
Then again, it will take a lot to prise this stock from my family portfolio. Though their best years may be behind them, I still see Lloyds shares as a reliable provider of powerful passive income!
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Cliff D’Arcy has an economic interest in Lloyds Banking Group shares.
