Lloyds‘ (LSE: LLOY) shares have long been one of the UK’s most popular investments. But their performance in 2026 has been anything but consistent.

After sinking to around 90p a pop back in March, the banking giant’s stock rose to above 120p in August. Since then however, the shares have sold off again.

Volatility in the markets is to be expected. We can’t know with any certainty whether a price will rise or fall from one day to the next.

Even so, I have some sympathy for those holders who are ready to throw in the towel. Especially as I can spot one FTSE stock in the financials sector that’s had a far smoother — and more profitable — ride.

Knocking Lloyds shares for six!

The value of online investment provider AJ Bell (LSE: AJB) has climbed by a third since January. Based on its most recent trading update (22 October) and CEO Michael Summersgill’s accompanying comments, it isn’t hard to see why:

I am delighted to report an excellent year in which we achieved record customer growth, record gross and net inflows and record assets under administration.

I don’t think you can get more positive than that. But this isn’t a one-off. AJ Bell’s been growing earnings ever since it listed in 2018.

With more of us opening Stocks and Shares ISAs and Self-Invested Personal Pensions (SIPPs) in an effort to grow our wealth for later life, this trend should continue. The UK population certainly isn’t getting any younger and relying on the State Pension seems incredibly optimistic.

To be fair, Lloyds Bank and AJ Bell aren’t direct competitors. The former is a sprawling FTSE 100 giant specialising in banking and mortgages while the latter remains in the FTSE 250, despite its shares doing very well in 2026.

But the respective valuations are also very different. AJ Bell trades on price-to-earnings (P/E) ratio of 20 while Lloyds’ stock changes hands for less than half that number.

While this premium makes sense considering the former’s growth credentials, it could also create problems if trading begins to slow. The company certainly isn’t lacking in competition for clients’ money either.

Lloyds has its own risks, of course. Any whiff of an economic downturn can impact sentiment.

But it does have one attraction that I always come back to…

Don’t forget the dividends!

As much as I can understand the frustration over its share price, the bank has been a great source of dividends in recent years.

As I type, the yield stands at 4.6% for the current fiscal year. That’s a good deal higher than the average in the market’s top tier. Those distributions also look like they’ll be easily covered by expected earnings.

For this reason, I still reckon Lloyds’ shares are worth considering as part of an income-focused portfolio, at least compared to AJ Bell. Its stock yields 2.7%.

Having said all this, I’ll be watching the price movement of these companies with interest as the Autumn Budget (28 October) approaches. Both could be positively or negatively impacted depending on what tax announcements are made.

What income stock do we like better than Lloyds Banking Group Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Paul Summers has no position in any of the shares mentioned.