Are Hargreaves Lansdown shares set to surge?

Since mid-2019, things have been tough for shareholders Hargreaves Lansdowne (LSE: HL). This stock has one of the FTSE 100 the index’s worst performance in recent years. Can this terrible trend be reversed? Also, is Hargreaves Lansdown stock ready for a comeback?

These FTSE 100 stocks are down

Fast forward four years and this Footsie stock is doing very well. The lowest price of Hargreaves Lansdown in March 2019 is 2,419 US Dollars. Unfortunately, it has gone downhill a lot since then.

To show how hard shareholders have been hit, here is the performance of Hargreaves Lansdown shares over eight time scales (excluding cash dividends):

A week	-1.0%
One month	-5.7%
Three months	-9.6%
six months	-11.3%
A year	-23.3%
Two years	-52.0%
Three years	-40.4%
five years	-52.8%

Over the entire period ranging from one week to five years, this Footsie stock has declined. Over two and five years, it has been more than half. Ouch.

On Friday, the stock closed at 785.2p. This values ​​the investment platform at £3.7bn, making it the fourth smallest company in the FTSE 100. At this lower valuation, it risks relegation to mid-cap. FTSE 250 index in the next quarter reshuffle increases.

Five facts about Hargreaves Lansdown

1. The group was founded together with Peter Hargreaves and Stephen Lansdown in July 1981.

2. Based in Bristol, the company is one of the city’s largest employers, with over 2,000 employees.

3. The company floated in London in May 2007 and has been on the FTSE 100 since 2011.

4. Today, the business manages around £140bn of assets for 1.8m customers.

5. The company’s reputation took a hit after the collapse of Neil Woodford’s venture income fund.

This group grows with the financial market

As the UK’s largest direct-to-consumer investment platform, Hargreaves is there for the taking. Competitors win new customers by cutting costs. And zero-commission stock transactions will definitely hurt the company. Thus, future revenue growth may be weaker.

Then again, as we save and invest more for our retirement and future, Hargreaves benefits from this trend. In addition, as asset prices rise, so do the group’s management fees and other profits.

Furthermore, Hargreaves customers are loyal, with some switching platforms from one year to the next. For example, everyone in the immediate family has an HL account. In addition, the company generates market-beating returns on capital, which it can reinvest for future growth.

I like dividends

Hargreaves Lansdown Corporation pays a €39.7 dividend per share last year and has an annual dividend yield of 39.7%. Based on the current share price of 785.2p, this equates to a tasty dividend yield of 5.1% per annum.

What’s more, it has a track record of raising dividends over time. Thus, I hope these payouts continue to climb. And a strong balance sheet has no debt to consider.

In addition, the stock’s forward price-to-earnings ratio of 12.5 equates to an earnings yield of 8%. This includes a dividend of almost 1.6 times.

I expect this stock to rise

Despite the negatives, I have added Hargreaves Lansdown shares to the buy list. I look forward to overcoming any obstacles to move forward again. Indeed, when I have the money, I plan to buy these stocks for my family portfolio. Then I hope to see this stock go up in the next year!