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Aberdeen (LSE: ABDN) shouldn’t be the flashiest identify within the FTSE. However for earnings buyers, it seems to have loads going for it proper now.
The shares supply a chunky 7% dividend yield that analysts count on to stay unchanged till the tip of 2028. And there could also be capital beneficial properties too, because it seems undervalued on key measures towards its friends.
These constructive elements are underpinned by the corporate’s current run of outcomes. They present clear progress in its ongoing restructuring plan.
So, is now the time for me so as to add to my holding on this world funding administration agency?
What’s the plan?
Aberdeen started restructuring shortly after being demoted from the FTSE 100 in September 2023. This entails simplifying its enterprise, reducing prices by £150m, and specializing in areas the place it has real aggressive energy.
From a £6m IFRS loss in 2023, Aberdeen delivered a £251m revenue in its 2024 outcomes, launched on 4 March 2025.
Its April Q1 buying and selling replace noticed the agency forecast a £300m+ working revenue and round £300m of internet capital technology in 2026.
And its H1 2025 outcomes, revealed on 30 July, noticed IFRS revenue up 47% 12 months on 12 months to £252m. Internet capital technology rose 7% to £111m, and diluted earnings per share soared 48% to 13.5p.
Belongings below administration (AUM) additionally elevated to £517.6bn, beating analysts’ forecasts of £511.5bn. And its most up-to-date replace — 22 October’s Q3 numbers — confirmed AUM rise 6%.
Aberdeen additionally reiterated its 2026 targets of £300m+ in adjusted working revenue, and internet capital technology of round £300m.
Share worth beneficial properties in view too?
In the end, it’s earnings (‘profits’) development that drives any firm’s dividends and share worth larger over time.
A threat for Aberdeen is any additional rise in the price of dwelling that would immediate prospects to withdraw funds.
Nevertheless, the inventory seems undervalued to me on a number of key measures in comparison with its rivals. Its 0.7 price-to-book ratio is the bottom in its peer group. This contains RIT Capital Companions at 0.8, M&G at 2.2, Bridgepoint Group at 2.6, and Authorized & Basic at 6.2.
Its 11.9 price-to-earnings ratio additionally seems low-cost towards its friends’ common of 37.3. And so does its 2.9 price-to-sales ratio in comparison with its rivals’ common of three.9.
How a lot might I make in dividends?
Aberdeen has paid the identical 14.6p dividend yearly since 2020. And consensus analysts’ forecasts are that it’s going to proceed to take action annually to the tip of 2028.
On the present share worth of £2.10, this provides a dividend yield of seven%. By comparability, the common dividend yield of the FTSE 250 is simply 3.4%.
So, my current £10,000 holding within the agency might probably make me £10,097 in dividends after 10 years. That is based mostly on a median 7% yield, though this may change loads over time. It’s also based mostly on the dividends being reinvested again into the inventory.
On the identical foundation, the dividends can be £71,165 after 30 years. Together with the £10,000 stake, the holding can be price £81,165 by then. And this might pay me £5,682 a 12 months in dividend earnings by that time!
Given this and the potential for share worth beneficial properties too, I shall be including to my holding within the firm very quickly.
