The Stocks and Shares ISA deadline lands in just over a month on 5 April, so there’s no time to lose.
Many investors will be looking for FTSE 100 stocks to add to their portfolio in March. They might like to consider Asia-focused bank Standard Chartered (LSE: STAN).
Its shares have been running riot lately. They’re among the best performers in February, jumping 18% over the month.
Should you invest £1,000 in Standard Chartered right now?
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Incredibly, they’re up 97% over the past 12 months to near a 10-year high.
I love a good momentum stock, but this also poses a problem. Have investors missed out on most of the excitement?
Standard Chartered isn’t the only FTSE bank flying
It’s worth noting that the FTSE 100 banks as a whole have had a stellar year, buoyed by high interest rates and resilient earnings.
NatWest is up 100%, Barclays up 80%, and HSBC up 50%. Standard Chartered is broadly following sector trends, dramatic as they are.
Latest earnings, published on 21 February, helped propel its share price even higher. Standard Chartered reported an 18% jump in statutory pre-tax profit to $6bn in full-year 2024. This followed a stellar showing in its wealth management and markets business.
It attracted 265,000 new affluent clients, bringing in $44bn of net new money. That’s up 61% on last year.
CEO Bill Winters was upbeat, stating that growth in its core markets of Asia, Africa, and the Middle East should outpace global expansion.
While that’s exciting, it’s by no means a racing certainty. Emerging markets have massive potential, but they’ve been highly volatile for the last 15 years.
Despite its strong performance, Standard Chartered still looks cheap on a trailing price-to-earnings (P/E) ratio of just 9.5. Again, that’s in line with many FTSE 100 banks. Its price-to-book value has edged up to 0.8. Not quite the bargain it was a year ago.
Has this equity travelled too far too fast?
One thing that sets Standard Chartered apart is its relatively low dividend yield. On a trailing basis, it yields just 2.3%.
That said, bank yields are sliding as shares rocket. Barclays now yields just 2.75%. NatWest’s is higher at 4.5%, with HSBC the clear winner at 5.73%.
It’s hard to complain about Standard Chartered, given that the board has just announced a 37% increase in its full-year dividend to 37 cents per share.
Analysts forecast the yield will tick up to 2.62% in 2025 and 2.8% in 2026. That’s still on the low side but the board has launched a $1.5bn share buyback. That’s part of a broader plan to return at least $8bn to shareholders between 2024 and 2026.
That’s a serious commitment and could provide support for the share price going forward.
With such a rapid rise, a pullback wouldn’t be surprising. In fact, the 15 analysts offering one-year share price forecasts have produced a median target of just over 1,181p. If correct, that’s a drop of almost 7% from today. That surprised me — most forecasts for FTSE 100 stocks have been in positive territory. At least the ones I’ve checked.
I still think Standard Chartered is well worth considering with a long-term view. It’s a personal decision though.
I’m hoping to buy HSBC in March. There’s too much crossover for me to buy both.
