Aviva (LON: AV) share price is doing well under Amanda Blanc. In her tenure, the stock has surged by more than 120%, much higher than its closest peers in the UK. Prudential has crashed by almost 40% while Admiral, Beazley, and Legal & General have risen by less than 70% in this period.
Aviva vs Admiral vs Beazley vs Legal & General
Amanda Blanc’s successful tenureAmanda Blanc has helped transform Aviva from a global insurer into a leaner organisation that focuses on the UK, Ireland, and Canada.
The most recent divestiture concluded this year when the company sold its Singapore operations in a $1.2 deal. Before that, Amanda sold its French business in a £2.8 deal in 2021. She also sold Aviva Poland and Aviva Vietnam.
Altogether, Aviva has exited eight markets and raised over £5 billion, a substantial figure considering that the company is now valued at £13.4 billion.
Divestitures are an important aspect in corporations these days since they help to remove the conglomerate discount. Ideally, most investors these days prefer lean operations that are more profitable. This explains why former conglomerates like General Electric are thriving.
Most importantly, Amanda has used these proceeds to reward her shareholders through dividends and buybacks. Its annual dividend has jumped from 0.128 pence in 2020 to 0.3180 in 2023.
It also paid a special dividend in 2022. Also, the total dividend yield has jumped from 4% in 2020 to 6.40% in 2024. Altogether, Aviva has delivered over £9 billion returns in the past 3 years.
Blanc has also used these funds to grow its market share in the remaining markets. On Tuesday, the company closed its deal to acquire AIG Life from Corebridge, a company owned by AIG in a £453 million deal.
As a result, the company has boosted its targets after beating the previous ones earlier on. The management expects that its operating profit will jump to £2 billion by 2026 while its Solvency II operating own funds will get to £1.8 billion by 2026.
This increased efficiency and profitability has helped raise hopes that Aviva could get acquired soon. The most lingering rumour is that Allianz, the German insurer, was considering a bid for the company. Other potential acquirers are the likes of Intact Financial and Ty Group.
I believe that Aviva has no reason to sell itself unless the deal is much higher than the current valuation of £13 billion.
Aviva share price forecast
The daily chart shows that the Aviva stock price has been in a strong bullish trend for a while. It has jumped from last year’s low of 353p to almost 500p. The stock has jumped above the 50-day and 100-day Exponential Moving Averages (EMA).
Also, the Average Directional Index (ADX) has moved above 40, signalling that the trend is still strong. Therefore, the outlook for the stock is bullish, with the next point to watch being at 550p.
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