Michelle McGagh on Nov 25, 2015 at 05:00 Stand by for bumper dividends at Aviva The acquisition of Friends Life by insurer Aviva (AV) will drive dividend growth and capital return.
Barclays analyst Alan Devlin retained his ‘overweight’ recommendation and 627p target price on the shares, which fell 0.9% to 501.7p yesterday.
‘Aviva is our top pick in European insurance as we believe the acquisition of Friends Life will drive significant capital and expense synergies, which will in-turn drive significant dividend growth and capital return,’ he said.
‘Friends Life was an underappreciated asset, under levered, over capitalised, and cash generative. Friends Life may have been ex growth, but we do not believe the acquisition has made Aviva ex growth.’
He added that Aviva had a number of growth opportunities, in its funds division Aviva Investors, Canada and Asia, as well as ‘the tail wind from UK motor price increases and the expense/capital synergy opportunity from its UK life operations’.
‘Aviva is our top pick among European insurers, with significant capital and expense synergies, coupled with underappreciated growth opportunities, and we remain “overweight”.’
Quite agree. Held my nerve when showing a big paper loss as knew fundamentals of company were good and now looking to make big profit which I will cash in. Did not buy anymore shares while in the lows as up to % limit per company.
Hottentot, quite agree about moving on from previous posts and hopefully AV will be a winner too. If it is will buy you a drink! Have previously made quite a bit on the share thanks to your previous posts but have also done the research and invested in this quite heavily as think future prospects looking very good.
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