The Lloyds (LSE: LLOY) share price has been heating up in 2024. Year to date, it’s climbed 13.5%. That means it’s outperformed the FTSE 100, which is up 9.2%.

But that hasn’t been the case in recent years. In fact, in the last five years, Lloyds has been a serial underperformer. As a shareholder, I’ve found it frustrating at times.

Lloyds is a strong business with solid fundamentals. However, its share price hasn’t done much. It’s usually headed in the wrong direction.

But now at 54.6p and with the stock gaining momentum, is the stock one of the best bargains out there? And should investors be considering it today?

Time to buy

I reckon so. There are a few reasons I think this. Firstly, Lloyds shares look severely undervalued. Investors can pick them up trading on just 7.3 times earnings. That’s comfortably below the Footsie average of 11.

For a business of Lloyds’ quality, that looks like it could be a steal. What’s even better is the fact that analysts have it dropping to just above six by 2026.

Above-average yield

Secondly, alongside its cheap price, it also has a meaty dividend yield. It boasts a payout of 5%, above the 3.9% average of the rest of its peers in the Footsie.

After it enjoyed a prosperous 2023, it hiked its dividend by 15% to 2.76p for the year, while it also announced a £2bn share buyback scheme. Looking ahead, that payout is expected to climb to 3.81p in 2026.

Ongoing threats

With these two things in mind, I think Lloyds is a stock investors should strongly consider buying today. That said, I’m not expecting fireworks anytime soon. Instead, it’s likely we’ll see further volatility from the stock.

For example, while it feels like we’re out of the woods with inflation, threats remain. And with ongoing economic uncertainty plaguing the UK, this will impact Lloyds. That’s because it’s mainly reliant on the UK for its revenue, unlike its more diversified peers.

A slow burner

But even if Lloyds is a slow burner, I’m not fussed about that. It may struggle in the upcoming months but, most importantly, I think it’s well-placed to perform strongly in the long term.

Interest rates will likely be cut this year and that means a few things for the bank. Firstly, on the downside, the wide margins banks have been enjoying over the last few years will shrink. We saw this play out in Lloyds’ Q1 results as its underlying net interest income fell by 10%.

But on the upside, rates are likely to settle in the Goldilocks zone in the medium term. Add that to the wider boost that investor sentiment and the market should receive from falling rates, and I think Lloyds’ share price could slowly continue trending upwards.

A bargain?

Analysts seem to agree. The 12-month target price for Lloyds is 59p. That’s an 8.1% premium to its current price.

That doesn’t make it the biggest bargain out there. But I’ve slowly been adding to my position in Lloyds, and it now makes up a sizeable chunk of my portfolio. I’ll be holding on to my shares. With any spare cash, I’ll look to increase my position.