Picture supply: Getty Photographs
A rising share value usually means a falling dividend yield, within the absence of dividend development. FTSE 250 share Aberdeen Group (LSE: ABDN) has not grown its dividend for a few years. However, regardless of its share value rising by 41% in simply 12 months, it nonetheless yields 7.5%.
May now be the time for buyers to contemplate this high-yield share?
Robust potential however an uneven efficiency
I ought to point out that I’ve owned the FTSE 250 share earlier than.
Again then, I felt the corporate had underlying strengths, akin to a big buyer base and a transparent worth proposition. Its enterprise mannequin had confirmed it might do nicely even when it didn’t at all times constantly ship.
That inconsistency was a part of the issue, although. Whereas it appeared to have the makings of a robust enterprise, it didn’t at all times appear to capitalise on them successfully.
Have issues modified?
Dividend seems enticing
There are some blended indicators about whether or not the enterprise is on extra of an excellent keel than it as soon as was. Total, I feel issues are wanting fairly good.
Within the first half of this 12 months, the corporate’s diluted earnings per share grew a really spectacular 48% 12 months on 12 months.
Nonetheless, adjusted internet working income slid 6% and internet flows have been unfavorable, which means extra money left the corporate’s funds than was put into them.
Seen positively, that may very well be an indication that the asset supervisor is taking a extra strategic strategy, targeted on worthwhile enterprise. Over time, it expects to develop.
The corporate has mentioned it’s dedicated to supporting the dividend. Whether or not that occurs will depend upon monetary efficiency.
However I see administration’s dedication as a constructive signal that it’s focussed on how you can keep the shareholder payout.
Within the first half, paying unusual dividends price Aberdeen £130m. That was amply coated by internet money flows from working actions of £241m.
One to contemplate
There’s a variety of work nonetheless to be carried out to unlock the complete potential of the FSTE 250 agency, I reckon.
But it surely has been getting its act collectively previously a number of years and I feel that reveals by in its first-half profitability.
I additionally suppose it’s mirrored within the robust efficiency of the share value over the previous 12 months.
It’s nonetheless round two-thirds decrease than it was again in 2015. That reveals how far the corporate has fallen in some buyers’ favour.
But it surely has well-known manufacturers, together with not solely Aberdeen itself but additionally the funding platform interactive investor. The corporate has a sizeable buyer base and has demonstrated that it might generate sizeable quantities of extra money over time.
Taken along with its concentrate on sustaining its dividend on the present degree, I see this as an revenue share for buyers to contemplate.
