The Aviva (LSE: AV) share price has decreased by 22% since January 2022. This decrease in share price has resulted in a high dividend yield of 7.8% for 2023, based on current dividend forecasts.
A high dividend yield indicates that the company pays a large portion of its earnings to shareholders as dividends. It can also suggest that the company’s share price is undervalued and may be a good investment opportunity.
Aviva’s 7.8% dividend yield for 2023 is more than double the average yield of 3.8% for FTSE 100 stocks. The almost double figure is positive and suggests that Aviva may be an attractive option for income-seeking investors, as the high dividend yield provides a steady income stream. Additionally, analysts project an 8.1% yield for 2024, further strengthening this argument.
Aviva is a multinational insurance company based in London. The company is listed on the London Exchange and is a member of the Footsie 100 index. The company offers various insurance products, including life, general, health, and pension plans. Aviva operates in several countries worldwide and has a strong presence in the UK, Europe, and Asia.
According to The Motley Fool, analysts are feeling positive about the company. Of course, they may not always be right, but it is important to listen to these brokers and get a view of the consensus when possible.
According to Stock Screener, more than 48% of analysts think the company is a good buy, and investors should jump on the prospect. However, another 48% are not selling and remain neutral, while 4% think the company is a sell.
According to projected earnings, analysts feel the company will hit a consistent bull run in 2023 and 2024. The data shows that investors expect gains of 24% in 2023 and an increase of 14% in the first quarter of 2024.
Should You Buy Aviva Shares?
Aviva could be a good opportunity for any investors, with a high Capital Adequacy Ratio (CAR) of 223.6%. Capital Adequacy Ratio or Solvency II ratio is a measure insurance companies use to assess their ability to meet financial obligations.
Companies calculate this by dividing the company’s available capital by its required capital, which is expressed as a percentage. For example, a ratio of 223% means that Aviva has more than twice the amount of capital required to meet its financial obligations, per Solvency II regulations.
This statement suggests that the company is financially stable and has a strong ability to absorb potential losses. Also, the high Solvency II ratio positively indicates a company’s financial health.
The company has a long-term mindset that will benefit investors and could be a good buy. However, investors should always consider many factors and research before making any investment decision.