Friday share tips: Barclays, Hays

10th Jul 2015 18:35

(ShareCast News) - If Barclays wants to light a fire under its shares it needs to fix its capital position and repair its investment bank. The latter is the common denominator between outgoing chief Antony Jenkins and the ex-bosses at Credit Suisse, Deutsche Bank and Standard Chartered. The investment bank's return on equity in the first quarter recovered to 9.1%, but that still failed to cover its cost of equity, at 10.5%.Despite that, the unit still accounts for a large part of the group's capital.Progress has been made, by shifting away from fixed income - which requires committing substantial amounts of capital for the long-term. However, while investors need time to see if the measures put in place are working the lender must also decide whether the business is there to serve the group's retail and corporate clients or if it should stand on its own and act accordingly. Until it plots a clear course investors will continue to place a discount on its shares, says the Financial Times's Lex column.There are several good reasons to buy into international recruitment group Hays. With the recovery underway both in its key developed and emerging world markets, confidence is on the rise, leading companies to boost hiring and candidates to change jobs more often and ask for higher salaries when they do.All of that trickles down to the fees the company charges. Indeed, things are going so well that it may soon add a special dividend to its recent commitment to increase its core pay-out. The new stream of payments may be double that of its core dividend from the next financial year. That may boost the stock's yield to between 5-10%. No wonder that income funds have been seen piling in over the past few months. Individual investors should follow suit, writes The Times's Tempus.