Key points:
- Aviva shares are up 7.77% in the past month but down 21.2% for the year.
- The firm pays an attractive dividend, making it a darling for dividend hunters.
- Would I buy Aviva shares? Read on to find out.
The Aviva plc (LON: AV) share price has risen by 7.77% in the past month, attracting significant attention from investors. However, the question remains, should you buy Aviva shares? We’ll try to answer this all-important question in the following sections.
The insurance company is a massive cash generator with an impressive balance sheet after disposing of some of its businesses, including its Polish business, to focus on its more lucrative markets led by the United Kingdom.
Also read: Five Best Starter Stocks For Beginners.
Aviva has undergone a significant makeover under the able leadership of Amanda Blanc. She took over as CEO on 6 July 2020 and has led the company’s transformation, including selling its Polish business for €2.5 billion to Allianz in March 2022.
The company has since implemented several divestitures as Blanc worked hard to make the firm extremely profitable, a goal which she has since accomplished. Still, she continues to work on the business from different angles. For example, the insurer recently closed the Aviva Investors Sustainable Income & Growth fund, which Francois De Bruin managed.
Aviva is constantly looking for new ways to improve its business, and analysts have pointed out that the company’s retirement products, which are tailored for those over 65 years, could do well in future as the number of people in this age bracket is expected to grow 50% from 2016 to 2035.
The insurance company currently pays a dividend of 7.5% after the recent decline in its share price, but the preferred shares should interest most dividend hunters. This is because the preferred shares pay a fixed dividend of 8.375p annually regardless of whether the company makes a profit or loss.
The preferred dividend is also paid ahead of the ordinary dividends. If the company does not pay it in any particular year, it usually accrues into the next year and must be paid ahead of payments to ordinary shareholders.
Would I buy Aviva shares? The short answer is yes. I would buy Aviva’s preferred stock due to the guaranteed payouts. In addition, the company has a solid business that should continue thriving for the foreseeable future.
*This is not investment advice.
Aviva share price.
The Aviva share price has risen 7.77% in the past month and could rally higher. Is it a buy?