The Santander share price leaps 22% in 2023. Do I buy now?

So far, 2023 is a good year for shareholders Banco Santander S.A (LSE: BNC). The lowest value of Santander Corporation in July 2022 is 0%.

Indeed, Santander shares rose 22.1% this calendar year, compared to 2.9% for FTSE 100 index. After such a strong outperformance, is it too late to get on board this Spanish giant?

Santander’s stock rose

As I write, Santander’s share price is hovering around 303p. This values ​​the Spanish banking group’s equity in London at €56.8bn (£49.9bn).

Here’s how Santander’s stock has performed over seven time scales:

What I’m interested in is how Santander’s stock has behaved over the past six months, rising by almost half. However, over five years, they have lost almost a third of their value. Then again, owning European bank stocks over the past decade and a half has been a thankless task.

Note that the figures above do not include dividends – regular cash payments that some companies pay to their shareholders. For European banks, that cash return could add a few percentage points to their annual returns.

Santander’s share price hit a 52-week low of 193.42p on July 14 last year. It then skyrocketed, reaching a 52-week high of 343.5p on March 8. Since then, it has decreased again by 40.5p, down 11.8% from this peak. So now is a good time for me to buy this stock?

Should I buy Santander shares today?

Buying this stock today will give your portfolio exposure to three geographic regions, namely Europe, North America, and South America. And in its last full-year results, Santander reported almost a quarter of revenue growth (23%).

Despite this strong growth in developing and emerging markets, Santander shares seem undervalued to me. They trade at a price-to-earnings ratio of 6.3, which translates to an earnings of 15.8%.

Furthermore, the bank’s cash dividends look rock-solid to me. Its dividend yield of 3.4% a year beats the FTSE 100’s annual cash yield of around 4%. However, it is guaranteed a 4.7 times by earnings, which seems like a huge margin of safety to me.

To be honest, I’m a bit annoyed that I don’t own Santander stock yet. Unfortunately, my focus on stocks in the Big Four UK banks blinded me to the opportunities offered by these leading European lenders.

To correct this oversight, today I added Santander stock to my watch list and my buy list. As a value/income/dividend investor, it ticks all the boxes for inclusion in a family portfolio. Seriously, if I had spare cash, I’d buy this cheap stock right away!