Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » The aberdeen share price is surging but still offers an 8.3% dividend yield
    News

    The aberdeen share price is surging but still offers an 8.3% dividend yield

    userBy userJune 5, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    The aberdeen share price (LSE: ABDN) has been on a tear recently. Since the tariff-induced sell-off, the stock is up 45%. The firm finally swung back to profit last year and with its fund outflows beginning to stabilise, I’m turning increasingly bullish on its outlook.

    Leading asset manager

    Over the last 10 years, aberdeen has made for a poor investment. Once the second-largest asset manager in Europe, the stock has fallen 70% from its peak in 2015. However, despite this, it still has over £500bn in assets under management.

    The downturn of the business is long and complicated. But in recent history its woes really boil down to two reasons. Firstly, the rise of low cost passive investment funds and ETFs, notably those tracking the S&P 500 and the Magnificent 7 stocks. Secondly, a waning of investor interest in emerging markets (particularly China), where it has a long heritage and expertise in investing.

    In 2024, though, the first glimmer of light emerged. Its largest division, Institutional and Retail Wealth, posted net inflows of £300m, after years of huge outflows.

    Evolving consumer market

    The number one reason why I like the stock is because of interactive investor (ii), its direct-to-consumer (D2C) offering. Since its acquisition in 2022, the platform has gone from strength to strength. Last year, net inflows doubled to £5.7bn. In particular, it has seen extraordinary growth in SIPP accounts.

    The D2C market is the fast growing sector in asset management. Today, ii accounts for 20% of a market worth nearly £400bn. But even that is a fraction of the estimated £4.6trn in the UK savings and wealth market. It’s little wonder that the D2C market is growing at 13% per year.

    Product innovation is one of ii’s greatest strengths. Its ability to attract both experienced and novice private investors to the platform has turbocharged growth. Last year, it launched ii Community. A Reddit-type forum, this enables people to discuss stocks, compare portfolios and get inspiration from other investors.

    Juicy dividend

    aberdeen’s dividend has been frozen at 14.6p per share for some time now. Over the medium-term it’s not expecting to grow dividend per share.

    Dividend cover does look precarious. It’s only covered 1.2 times by adjusted capital generation. On a net capital generation basis, the cover is only 0.9 times. Any number less than one does ring alarm bells for me. The business will not increase payouts until cover reaches at least 1.5 times adjusted capital generation.

    Despite capital generation growing strongly, the business is nowhere near out of the woods yet. Its equities portfolio continues to lag badly. Only a third of its actively managed funds outperformed a benchmark last year. That hardly incentivises institutional investors to park capital in its funds.

    However, I continue to view the stock as a good long-term bet. Excessive valuations in US equities, geopolitical risks, inflation, and spiralling government deficits highlight the huge risk investors face navigating today’s markets. I genuinely believe the next 10 years will look nothing like the previous decade. That could bode well for active managers like aberdeen.

    With an 8.3% dividend yield on offer, I’m being handsomely paid to wait for a recovery. That’s why I recently bought more of its shares for my portfolio.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleFederal student loan interest rates fell for the first time in 5 years
    Next Article Monroe Sequestration Partners To Store CO2 Captured By Southern Energy
    user
    • Website

    Related Posts

    First Solar (FSLR) Outpaces Stock Market Gains: What You Should Know

    June 6, 2025

    Dow, S&P 500, Nasdaq surge after jobs report, Tesla jumps on Musk-Trump cooldown

    June 6, 2025

    Are BP shares undervalued? | The Motley Fool UK

    June 6, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d