Yahoo Finance Aviva PLC's Dividend Analysis
Assessing the Sustainability and Prospects of Aviva PLC's Dividends
Aviva PLC (AVVIY) recently announced a dividend of $0.57 per share, payable on 2024-05-30, with the ex-dividend date set for 2024-04-11. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Aviva PLC's dividend performance and evaluate its sustainability.
What Does Aviva PLC Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Aviva is a multiline insurer that is listed on the London Stock Exchange. The company traces its roots back to the 17th century with the establishment of Hand-in-Hand. After the Great Fire of London, this mutual was formed to provide protection against fires. Hand-in-Hand was then acquired by Commercial Union in 1905. Over the years, Hand-in-Hand insured London landmarks such as London Bridge, the British Museum, and the Palace in Lambeth. The life insurance part of Aviva began in the early part of the 18th century with the establishment of Amicable, again a mutual society but this time to protect widows and children against the loss of life.
A Glimpse at Aviva PLC's Dividend History
Aviva PLC has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aviva PLC's Dividend Yield and Growth
As of today, Aviva PLC currently has a 12-month trailing dividend yield of 6.24% and a 12-month forward dividend yield of 6.65%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Aviva PLC's annual dividend growth rate was 35.40%. Extended to a five-year horizon, this rate decreased to 1.70% per year. And over the past decade, Aviva PLC's annual dividends per share growth rate stands at 5.10%.
Based on Aviva PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Aviva PLC stock as of today is approximately 6.79%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to consider the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-12-31, Aviva PLC's dividend payout ratio is 0.78, which may suggest that the company's dividend could be at risk.
Aviva PLC's profitability rank offers an understanding of the company's earnings prowess relative to its peers. With a profitability rank of 5 out of 10 as of 2023-12-31, the company has shown fair profitability, reporting net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must demonstrate robust growth metrics. Aviva PLC's growth rank of 5 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average annual increase of approximately 15.90%, outperforming about 79.54% of global competitors.
Aviva PLC's 3-year EPS growth rate showcases its capability to grow earnings, a crucial factor for sustaining dividends. The company's earnings have increased by approximately 4.30% per year on average, outperforming about 41.91% of global competitors. However, the company's 5-year EBITDA growth rate of -7.90% indicates challenges but still outperforms about 16.05% of global competitors.
Next Steps
While Aviva PLC's dividend payments and growth rates appear promising, the payout ratio and profitability metrics warrant careful consideration. Investors should evaluate whether the current dividend policy is sustainable in the long term, given the company's growth and profitability ranks. For those seeking high-dividend yield stocks, GuruFocus Premium users can use the High Dividend Yield Screener for further research and investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
