Lloyds (LSE: LLOY) shares have taken a beating in the previous few days, together with the remainder of the FTSE 100. The Lloyds share price is down 7.75% within the final week, and that’s regardless of climbing 1.89% this morning.

Loads of different blue-chips are down after current volatility, and I’m hoping to purchase the largest bargains at diminished costs. Lloyds is excessive on my procuring listing. Regardless of current troubles, it’s nonetheless had a superb yr.

FTSE 100 cut price

During the last 12 months, the Lloyds share price has soared 27.86%. That places current volatility into perspective. Loyal traders are nonetheless comfortably forward.

The full return is nearer to 33% as soon as dividends are included. The inventory’s trailing yield is a pretty 5%, comfortably coated 2.8 instances by earnings. That provides loads of scope for the board to extend payouts.

In 2022, Lloyds hiked its dividend per share by 20%, from 2p to 2.4p. In 2023, it hiked it to 2.76p. That’s a 15% improve.

Analysts reckon the dividend will develop by a mean of 12.4% over the following three years. So I’m not simply in line for a excessive fee of passive revenue, however a rising one. Dividends aren’t assured, in fact, however this appears safer than most.

It can look much more enticing each time the Financial institution of England cuts rates of interest. That’ll squeeze bond yields and financial savings charges, with out immediately impacting the Lloyds yield.

As we speak, I maintain 9,657 Lloyds shares. I’d fortunately double that to generate long-term dividend revenue and share price progress.

The shares nonetheless look low-cost, buying and selling at 7.3 instances earnings. That’s roughly half right now’s FTSE 100 common price-to-earnings ratio of 14.3 instances.

Dividend revenue and progress

Nevertheless, it’s not as low-cost because it was. The price-to-book ratio has crept up from 0.74 to 0.9 during the last yr. Let’s see what the chart says.

Chart by TradingView

There are different worries. Lloyds has put aside £450m to cowl a possible motor finance mis-selling scandal. This can be nowhere close to sufficient. We could not know till subsequent yr.

On 6 August, analysts at Citi downgraded Lloyds to impartial after mentioning that it was the one large UK financial institution to fall wanting pre-provision revenue forecasts. This adopted RBC Capital Markets’ determination to downgrade Lloyds from ‘outperform‘ to ‘sector carry out‘, after the shares hit its 60p price goal. That was earlier than the current dip, in fact. As we speak, the inventory trades at 56p.

The share price is unlikely to leap one other 25% over the yr forward. No inventory goes up in a straight line. Nevertheless, I ought to nonetheless get my dividends, and so they’ll be price greater than final yr. I’ll reinvest it immediately.

If the UK financial system springs into life and traders really feel extra optimistic, the Lloyds share price may climb one other leg upwards. Which will take time, however given I’m planning to carry this inventory for 20 years or extra, that’s precisely what I’ve acquired.

Given my long-term view, it’s nonetheless a screaming purchase to me. I’ll benefit from the dip and add to my stake.