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A rising share worth usually means a falling dividend yield, within the absence of dividend progress. FTSE 250 share Aberdeen Group (LSE: ABDN) has not grown its dividend for a few years. However, regardless of its share worth rising by 41% in simply 12 months, it nonetheless yields 7.5%.
May now be the time for buyers to think about this high-yield share?
Sturdy potential however an uneven efficiency
I ought to point out that I’ve owned the FTSE 250 share earlier than.
Again then, I felt the corporate had underlying strengths, equivalent to a big buyer base and a transparent worth proposition. Its enterprise mannequin had confirmed it may do effectively even when it didn’t all the time constantly ship.
That inconsistency was a part of the issue, although. Whereas it appeared to have the makings of a powerful enterprise, it didn’t all the time appear to capitalise on them successfully.
Have issues modified?
Dividend appears to be like enticing
There are some combined indicators about whether or not the enterprise is on extra of a good keel than it as soon as was. General, I believe issues are wanting fairly good.
Within the first half of this yr, the corporate’s diluted earnings per share grew a really spectacular 48% yr on yr.
Nevertheless, adjusted web working income slid 6% and web flows had been detrimental, that means extra money left the corporate’s funds than was put into them.
Seen positively, that could possibly be an indication that the asset supervisor is taking a extra strategic method, centered on worthwhile enterprise. Over time, it expects to develop.
The corporate has mentioned it’s dedicated to supporting the dividend. Whether or not that occurs will rely upon monetary efficiency.
However I see administration’s dedication as a optimistic signal that it’s focussed on tips on how to keep the shareholder payout.
Within the first half, paying atypical dividends price Aberdeen £130m. That was amply lined by web money flows from working actions of £241m.
One to think about
There may be quite a lot of work nonetheless to be performed to unlock the total potential of the FSTE 250 agency, I reckon.
However it has been getting its act collectively prior to now a number of years and I believe that reveals via in its first-half profitability.
I additionally suppose it’s mirrored within the robust efficiency of the share worth over the previous 12 months.
It’s nonetheless round two-thirds decrease than it was again in 2015. That reveals how far the corporate has fallen in some buyers’ favour.
However it has well-known manufacturers, together with not solely Aberdeen itself but additionally the funding platform interactive investor. The corporate has a sizeable buyer base and has demonstrated that it may well generate sizeable quantities of extra money over time.
Taken along with its deal with sustaining its dividend on the present degree, I see this as an revenue share for buyers to think about.
