NatWest is one of the top performing UK stocks of 2024.
According to Morningstar data, in terms of year to date total return on a quarter-end basis, NatWest Group NWG returned 64.72%, missing out on the top spot held by Rolls Royce at 75.91%.
In general UK financials have outperformed this year, bolstered by a high-interest-rate environment, which facilitated larger earnings from higher rates on mortgages, loans, and cash deposits.
But the sector’s buoyant performance has also been aided by its relative undervaluation.
Year to date, NatWest’s shares have jumped 86.6% and are currently trading at £4.10, above Morningstar’s Fair Value Estimate of £3.60. NatWest is also a dividend payer, but its dividend yield has fallen.
Its current dividend yield sits at 4.26%, below the 7.7% it recorded at the end of December 2023.
NatWest has just paid an interim dividend of 6p to shareholders on September the 13th. However, the bank has also been on the forefront of the news after its recent change of guard.
Newly appointed chief executive Paul Thwaite took over from Dame Alison Rose who stepped down last year after the “debanking” scandal involving right-wing campaigner-turned Reform Party MP Nigel Farage.
Thwaite joined the bank in 1997 and has pledged to continue Rose’s business strategy – for instance adapting the bank for the digital age. Investors will have to see how the bank performs as rates continue to fall. If indeed it is the case that they do.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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