Lloyds Bank share price is at its lowest in 4 months. Here’s what I’d do now

first_img Manika Premsingh | Monday, 24th February, 2020 | More on: LLOY I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! The FTSE 100 banking giant Lloyds Banking Group (LSE: LLOY) isn’t in a good place. Its share price dropped to a four-month low of 55.3p at the last close. What’s worse, it’s also down by 13% from the start of 2020. Broader stock-market plungeAs an investor, should I now be worried about Lloyds’s share price fall? I’d take some comfort by considering the larger context. The bank’s part of the FTSE 100, which too has declined from the start of the year, though by a far smaller 2.6%. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Rising global uncertainty, led by fears of the coronavirus, has impacted the overall stock markets. It’s to be expected that a cyclical stock like LLOY sees a sharper dip. The fall wouldn’t be particularly worrisome if the uncertainty had been contained. Unfortunately, it hasn’t, as the virus’s impact is getting bigger as it spreads outside China. Tied to the economy Added to this is the fact that the UK economy isn’t entirely out of the woods either. In the last quarter of 2019, UK’s growth showed no change from the quarter before. Forward-looking indicators do suggest recovery, but I’d wait for confirmation from official numbers. This will inform me of both whether the recovery is taking place and if it is, the extent to which it’s occurring.  If the recovery is weak, it may mean nothing for LLOY. If it is robust, however, banking of all the sectors could be in for good times given how tightly it’s linked to economic conditions. But we don’t know that for certain right now. In fact, further spread of COVID-19 could put a dent to UK’s recovery, at least in the short term. Over the longer term as well, it’s a wait and watch situation. The economic outcome will also be influenced significantly by Brexit negotiations with the EU.  Investing for high passive income With so many question marks about the future, I’d be particularly cautious of investing in LLOY for capital gains. The share doesn’t have a good track-record of recovery for the patient investor.  Even if I consider its performance over a shorter time frame, it has been disappointing. Over the past five years, on average, the LLOY share price has risen by just a little over 2%. Many other FTSE 100 stocks have shown much better performance over the same period. I do like its 6.1% dividend yield, however. It’s significantly above the FTSE 100 average yield and there’s reason to believe that dividend income will continue to be rewarding for investors. LLOY increased the payout in 2019 by 5% to 3.37p from the year before. In its latest financial results, it says that it will “continue to target a progressive and sustainable ordinary dividend”.For the foreseeable future, I’d consider LLOY as an income investment. I’d only look at it as a growth investment if was really optimistic. At the very least, I’d like to see more concrete evidence that the share price is on an upswing before investing for capital appreciation. Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address Simply click below to discover how you can take advantage of this.center_img “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Lloyds Bank share price is at its lowest in 4 months. Here’s what I’d do now  I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. 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