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Insurer Aviva (AV.) is the darling blue-chip this morning after a 6% bullish breakout to test 22-months highs of 545p. The fuel for this is not so much solid 2016 financial results, although these are what have enabled management to entice in fresh bulls with an attractive 12% dividend hike and the promise of additional capital returns via buybacks or special dividends.
Management’s opening gambit (“Aviva’s results are simple and clear cut: more operating profit, more capital, more cash, more dividend. And there is more to come”) has clearly done its job in adding to optimism that has already seen shares rally over 70% from their referendum lows.
Successful balance sheet transformation allowing more capital returns is simply reinvigorating interest, creating a rush among investors who like the sound of, not just special dividends and a generous 5% yield, but the potential for the shares to rally another 6% to 2015 highs of 578p.
Mike van Dulken, Head of Research, 9 Mar
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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