From early 2023 through to spring 2024, Barclays‘ (LSE:BARC) shares were yielding well above 4%. But then something changed — its share price started to take off. Since February 2024, it’s more than tripled and, despite the bank steadily increasing its dividend, the yield on its shares has fallen.

However, in July, on the back of another strong set of results, the bank announced that it was increasing its interim dividend by a massive 97%. Does this make it a top stock to consider for passive income? Let’s take a closer look.

What’s the City expecting?

Analysts’ consensus is for a 2026 payout of 15.2p. But many of these forecasts were prepared before Barclays announced its latest results. In fact, the bank smashed the 5.2p interim dividend predicted by brokers and declared a payout of 5.9p (13.5% more).

If the trend of improved profitability continues – earnings per share for the first half of 2026 was 30.7p compared to 24.7p for the same period a year earlier — I wouldn’t be surprised if we see a 2026 total payout higher than the 15.2p expected by analysts. But let’s stick with this forecast for now.

Anyone buying shares today (9 September) would not be entitled to the 5.9p payout because the stock went ex-dividend on 8 August. But I’m already a shareholder in Barclays. And if the analysts are right, my 458 shares will earn £69.62 in dividends over the next 12 months. They cost me £1,997.46, so my effective yield is currently 3.49%. New shareholders would achieve a return of 3.09%.

Should I buy more?

To be honest, when it comes to income, there are dozens of other stocks that I would consider ahead of Barclays. In fact, 57 of the FTSE’s 100 members have a better yield on a trailing 12-months basis.

Don’t get me wrong, the dividend’s pretty good. But I own the stock because I’m looking for some capital growth. I think of the payout (no guarantees, of course) as the icing on the cake.

And I think there’s a good chance that the share price rally will continue.

Why?

The bank’s investment arm is likely to continue to benefit from global market instability. And its return on tangible equity – a key measure of profitability and operating efficiency – is increasing.

Admittedly, my shareholding could take a hit if rumours about a sector-wide windfall tax being introduced prove to be accurate. The Chancellor could see the industry’s soaring profits as a much-needed source of revenue.

And concerns have been raised that although Barclays’ traders are making some excellent returns – quarter-on-quarter income soared 20% during the three months to 30 June — some of its Wall Street rivals are doing even better.

However, markets are expecting further interest rate rises, which will give the bank the opportunity to increase its net interest margin. And ongoing share buybacks should help earnings per share. I also like the fact that its current market-cap is less than its book value.

Mindful of the risks, I think Barclays’ shares are worth considering. However, I don’t want to buy any more at the moment because I’m trying to keep my portfolio as diversified as possible. Fortunately, there are lots of other exciting opportunities for me to look at elsewhere… 

Should you invest £5,000 in Barclays Plc right now?

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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Barclays Plc made the list?

James Beard owns shares in Barclays plc.