The Royal Mail share price has climbed 50% in 2021. Is there more to come?

first_imgThe Royal Mail share price has climbed 50% in 2021. Is there more to come? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. See all posts by Alan Oscroft Our 6 ‘Best Buys Now’ Shares Get the full details on this £5 stock now – while your report is free. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Image source: Getty Images. Enter Your Email Addresscenter_img Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. If you’d asked me which shares I expected to do well in the first half of 2021, Royal Mail Group (LSE: RMG) would have escaped my notice. But my Motley Fool colleague Rupert Hargreaves got it right, after turning bullish on the stock last year. So far this year, the Royal Mail share price has climbed 54%. The FTSE 100 is up 10%.Short-term share price movements can be deceptive, though, and it’s the longer term that counts. And looking back further, Royal Mail has been an even bigger winner. Over the past 12 months, Royal Mail shares are up a stunning 200%. The turnaround kicked off in the autumn, so it looks like Rupert got his timing right too.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The Royal Mail share price hasn’t quite regained its levels of 2018, though it’s not far behind. But while an impressive past performance is good to see, it’s well known as a pretty poor indicator of where things will go next. So what might the future hold for Royal Mail as an investment?Postal business boostThe Covid-19 lockdowns were good for the postal business. I’ve made far more online purchases in the past 15 months, as have millions of others. And I’ve noticed one interesting thing. I’ve been concerned about the increasing competition from other parcels services in recent years. I’ve also been critical of Royal Mail’s relatively poor delivery tracking technology — while others were giving me one-hour windows for my parcels, Royal Mail could typically do no better than ‘some time before 8pm.’ But the thing I’ve noticed is that the vast majority of my purchases are still delivered by Royal Mail.How does this translate to the financial bottom line? Full-year results are due on 20 May, and it looks like they’re going to be positive. In its last update at the end of March, the firm told us it expects adjusted operating profit of around £700m. The board also “concluded that it is appropriate to pay a one-off final dividend of 10p per share in respect of FY2020-21,” which shareholders should receive on 6 September.That 10p represents a yield of approximately 2% on the current Royal Mail share price, which doesn’t sound impressive. But if it’s indicative of a return to progressive future dividends, there could be a lot more to come. So, would I buy now?Royal Mail share price too high?No, I probably wouldn’t, for several reasons. One is that I can’t help seeing the share price surge as overdone. And I think we could see a period of profit-taking and sideways movement over the rest of the year. In fact, if this month’s results don’t beat expectations, I wouldn’t be surprised to see a lot of short-term investors cut and run — and that could send the shares down again.Over the longer term, that competition is still there and growing, even if it hasn’t taken over yet. And Royal Mail still has a strongly unionised workforce, with whom it hasn’t exactly been on the best of terms in recent years.I’m pleased to see the recovery, but it’s not one for me at today’s Royal Mail share price levels. Alan Oscroft | Tuesday, 11th May, 2021 | More on: RMG FREE REPORT: Why this £5 stock could be set to surgelast_img read more