Anyone who had the foresight (or luck) to buy Lloyds Banking Group (LSE:LLOY) should be a elated bunny at any point since 2019. The Lloyds share price has surged after crashing during the Covid-19 crisis in 2020. But after such forceful growth over five or six years, surely the future looks less glowing for Lloyds shareholders? Here are my thoughts…

Wonderful Lloyds stock

I clearly remember the stock market crash of 2020, which is why I came back to writing A motley fool right when the market bottomed out in March 2020. From peak to trough in 2020 FTSE100 AND S&P500 indexes fell by approximately 35%. At the time, my wife and I were investing money in British and American stocks, fully convinced that both markets were wildly undervalued.

Although global stock markets recovered quickly from their spring 2020 lows, the Lloyds share price only bottomed out in the fall. On September 22, 2020, Black Horse Bank shares hit an intraday low of 23.58p. Anyone who bought during this turbulent time would have more than quadrupled their money since then, with some juicy cash dividends to boot.

As I write this, Lloyds shares are trading at 99.88p and the gigantic British bank is valued at £58.9 billion. The share price has risen even further in 2026, reaching 101.75p on Tuesday 6 January. This means that the prices of these popular and widely distributed stocks increased by 85.4% in one year and by as much as 171.2% in five years (excluding dividends).

I am a elated owner

To be clear, my family portfolio holds shares in a FTSE 100 company that pays 43.5 per annum for our holding in mid-2022. To date, we have a paper yield of 129.8% plus many dividends.

I’m surprised that such “boring old economy” stocks have generated such impressive returns over the last 3.5 years. We bought Lloyds shares because of the then generous dividend yield, which fell sharply as the share price rose. On the other hand, as a long-term value investor, I will happily take my profits, whatever they come.

Speaking of dividends, Lloyds’ payout has skyrocketed from 2p for 2021 to 3.17p for 2024, a jump of 58.5% in three years. I expect shareholder rewards to continue to grow modestly – perhaps by a high single-digit percentage.

Lloyds is no longer economical

At current price levels, the stock trades at almost 15.2 times historical earnings, which translates to a yield of 6.6% per year. This means that the dividend yield of 3.3% per annum is covered twice by final profits, which is a gigantic margin of safety.

To me they don’t feel like the basics of a flashy purchase. For example, when we bought Lloyds shares, the dividend yield was almost double what it is now. Moreover, the share price is almost double the 2025 low of 52.43p, reached almost a year ago on January 10, 2025.

What’s next for Footsie wrestling? With interest rates expected to fall this year and the housing market looking frail, I don’t expect much excitement in 2026. Perhaps a peak of 115p and a further 15% escalate, but who knows? Although Lloyds shares are no longer a bargain, it may take another crisis before I am convinced to sell our shares!