August has been month for FTSE 100 insurer Aviva (LSE: AV). The Aviva share worth hit a degree final seen in 2008, when the monetary disaster was taking maintain.
It has been a protracted highway! Nonetheless, extremely, the Aviva share worth is barely half what it was within the late Nineteen Nineties.
Whilst a long-term investor, I despair on the considered placing cash right into a share and nonetheless nursing a big paper loss over 1 / 4 of a century later. Sure, Aviva’s dividend yield of 5.7% is engaging, however share worth actions matter too.
Nonetheless, because the current worth motion reveals, Aviva appears to have the wind in its sails now. It has moved up 29% over the previous yr alone. Might it make sense for buyers to contemplate the share now?
Comparisons will be useful, but additionally unhelpful!
First, a phrase in regards to the worth having now come full circle since 2008.
Does that counsel something in regards to the state of the general monetary market proper now, similar to that we could also be in the same scenario to 2008?
There are some similarities, however there are additionally a whole lot of variations. That’s true for the market total and it’s definitely the case for Aviva, particularly.
It has actually streamlined its enterprise in recent times, promoting off a number of operations and having a far clearer strategic give attention to its core UK market, in addition to a number of different locations.
Aviva is performing strongly
That has solely been a part of the strategic drugs doled out beneath present administration.
Aviva’s takeover of UK rival Direct Line has added to its already huge UK operation. That ought to provide economies of scale, however it will increase the focus danger: if the UK normal insurance coverage market enters right into a interval of robust worth competitors, for instance, Aviva will certainly be affected.
I additionally suppose it’s price ready to see how the Direct Line acquisition finally pans out. The corporate had a disappointing couple of years earlier than it was taken over.
It stays to be seen whether or not higher administration can repair its issues or if an excessive amount of harm had already been completed, for instance, in relation to Direct Line’s popularity with prospects.
Regardless of such considerations, there isn’t a denying that Aviva has been doing very effectively in recent times. Within the first half of this yr, in comparison with the prior yr’s equal interval, the interim dividend grew 10%, underpinned by working revenue up by greater than a fifth and what is called Solvency II personal funds technology up by 20%.
One to contemplate
Which means Aviva is throwing off massive quantities of surplus money. That has helped it develop its dividend handsomely in recent times following a minimize in 2020.
I see lots to love right here and reckon Aviva is a share price contemplating, even after its current worth progress.
