Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, part-nationalized British bank Lloyds Banking Group (NYSE: LYG) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Lloyds' business and see what CAPS investors are saying about the stock right now.

Lloyds facts

Headquarters (Founded)

London (1985)

Market Cap

$82.64 billion


Diversified banks

2009 Revenue

$8.11 billion


CEO J. Eric Daniels (since 2003)

CFO Tim Tookey (since 2008)

Return on Equity (2006-2009)



HSBC Holdings (NYSE: HBC)
Royal Bank of Scotland (NYSE: RBS)


Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 1,050 members who have rated Lloyds believe the stock will outperform the S&P 500 going forward. These bulls include BikeTheMtn and Teacherman1.

Just two days ago, BikeTheMtn tapped Lloyds as a bankable turnaround bet:

I believe this bank has the ability to recover from the economic punch it received. All-in-all, it was in pretty good standing during the recession until it was pressured to merge with HBOS. It has made great progress in getting a handle on the bad debt from the HBOS acquisition, and my opinion is that in the long term it will turn itself back around.

If Lloyds' recent results are any indication, that turnaround is happening sooner rather than later. In the first half of 2010, the company swung back to profitability ($950 million) as its bad debt charges fell by more than half. Lloyds' purchase of toxic mortgage lender HBOS has certainly cost it billions in loan-related losses, but the move is at least starting to reveal some true powerhouse potential. With the stock continuing to lag all of its main rivals HSBC, Royal Bank of Scotland, and Barclays over the past year, Lloyds might be a timely way to grab a future champion on the cheap.

CAPS member Teacherman1 elaborates on the bull case:

Watch this for any dips, then buy. They have turned the corner and are once again profitable. Be patient, and accumulate on dips. They may have to issue more shares at some point to pay off the Govt., or maybe the Govt. will do like the US is doing with [Citigroup] and sell some off as it goes up. Will likely be a combination of the two. They did a "rights offering" when they issued more shares last time (to keep the Govt from taking a majority interest), so that current shareholders would not get diluted. They are very investor friendly.

What do you think about Lloyds, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.