Why Barclays PLC (BARC) Beats Royal Bank of Scotland Group plc (RBS) and Lloyds Banking Group PLC (LLOY)

Barclays PLC (LON:BARC), on the other hand, currently looks undervalued on its forward P/E of just under 9 and with a PBV of only 0.7. There’s a dividend yield of a modest 2.3% expected this year. But it should be nearly five times covered, suggesting there’s plenty of scope for future increases — even if the bank has had to set aside more than 3 billion pounds to cover the mis-selling of payment protection insurance and interest rate hedging products.

Is Barclays cheap?
Of course, some will say that’s a good reason for Barclays PLC (LON:BARC) to be lowly valued. And it was, after all, also fined a total of 290 million pounds for its part in attempting to manipulate the interbank LIBOR rate. But I reckon a good time to buy a share is when sentiment is against it, and sentiment does seem to be against Barclays PLC (LON:BARC) despite some important changes.

Bob Diamond, head of the bank at the time of its shadiest days, has gone, as have two of the bank’s divisional bosses who were close to him, investment banking head Rich Ricci and wealth management head Tom Kalaris. New chief exectutive Antony Jenkins seems like the much-needed new broom.

For those reasons, Barclays PLC (LON:BARC) is my pick of the FTSE 100 banking sector.

Finally, if you’re looking for investments that should take you all the way to a comfortable retirement, I recommend the Fool’s special new report detailing five blue-chip shares. They’ll be familiar names to many, and they’ve already provided investors with decades of profits.

The article Why Barclays Beats Royal Bank of Scotland and Lloyds originally appeared on Fool.com and is written by Alan Oscroft.

Alan does not own any shares mentioned in this article. The Motley Fool owns shares in Standard Chartered. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.