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The FTSE 100’s all the time filled with surprises. Who may have imagined a yr in the past that gold miner Fresnillo would rocket greater than 250%? Or telecoms specialist Airtel Africa would soar 215%? Not me. Each shares had largely handed my radar, till they abruptly went gangbusters. However one other large success story was on my watchlist, so I’m kicking myself for lacking out. It’s up a blistering 65% over 12 months so can it proceed to soar?
The inventory in query is Asia-focused insurer Prudential (LSE: PRU), which I truly owed a few many years in the past. I banked a fast 70% acquire and whereas I’m a lot slower to promote shares nowadays, preferring to purchase and maintain for the long term, I don’t remorse my resolution. This one has underperformed for years.
The Prudential share value soars
Prudential has enormous potential in Asia and Africa, promoting pension and safety merchandise to the rising center class, but the monetary disaster and years of weak regional sentiment noticed the shares largely ignored. The dividend was modest, under 2%, so I moved on.
Rising markets have lastly regained momentum, with the MSCI Rising Markets index up nearly 33% within the yr to 31 October, towards lower than 20% worldwide. Traders have waited a very long time for this second.
Prudential had already posted a robust set of 2024 outcomes, with adjusted working revenue earlier than tax up 10% to $3.1bn, whereas 2025 has been upbeat, thus far. The stability sheet’s robust, with a stable free surplus money ratio of 234%. CEO Anil Wadhwani stated long-term development tendencies in Asia and Africa are “reasserting themselves”, creating actual alternatives.
Dividends and buybacks
The board boosted the dividend 13% and returned $2bn by means of share buybacks throughout 2024 and 2025. Throughout 2024-2027, whole shareholder returns together with dividends may exceed $5bn.
So can this proceed? There’s nonetheless restoration potential right here. Prudential shares are down 18% over the past 5 years, and commerce decrease than they did 10 years in the past. The value-to-earnings ratio stands at 15, so it’s not precisely costly.
Analyst forecasts are optimistic, producing a median one-year goal of 1,298p. If right – and forecasts ought to be all the time be taken with a pinch of salt – that will indicate stable 12-month development of one other 23% from right here. A powerful 16 out of 18 analysts charge Prudential a Purchase, and two say Maintain. There aren’t any sellers.
It’s all the time dangerous shopping for a inventory after a robust run, chasing previous efficiency can backfire. Rising markets stay risky. Earnings seekers must also try rival FTSE 100 insurers, a few of which may yield as a lot as 8% or 9%.
Nevertheless, Prudential exhibits that even a long-forgotten FTSE 100 inventory can spring again, rewarding persistence and timing. The restoration in Asia and Africa is actual and whole shareholder returns beneficiant, however the path stays bumpy. Traders would possibly take into account shopping for with a long-term view, whereas bracing themselves for volatility alongside the way in which.
