Standard Life Aberdeen Share Discussion Threads

[ramellous] 20/12/2019 21:23

Yup, been in since apr 18 for the divi. Still underwater but nearly breathing again..

[joshuam] 20/12/2019 19:46

Stayed long anyone else stuck with it

[cwa1] 19/12/2019 15:06

Certainly not too far off that now.

[spud] 19/12/2019 11:20

Dividend growth to slump to lowest rate in a decade in 2020
The FTSE's predicted 2020 payout figure represents growth of just 1.8% from this year’s expected £89.5 billion.


Markets December 18, 2019 by Tom Bailey

The FTSE 100 is expected to hand back a record amount of dividends to investors next year, according to AJ Bell’s latest figures. But there’s a sting in the tail, in that dividend growth will slump to its lowest rate in a decade.

According to the AJ Bell’s latest Dividend Dashboard report, the blue-chip stock index is expected to see dividend payments grow, producing a yield of 4.7% in 2020. That would bring the total amount paid out by the index to a record £91.1 billion, above what the FTSE 100 is expected to pay in 2019.

However, the predicted 2020 payout figures represents growth of just 1.8% from this year’s expected £89.5 billion. If both predictions are correct, that would represent the lowest rate of growth since 2009 and 2010.

However, when looked at in terms of yield, the index is still paying out generous amounts. But how safe is that yield?

According to Russ Mould, investment director at AJ Bell, dividend payments are forecast to be very concentrated in 2020. He points out that just 10 stocks are expected to generate more than 98% of the increase in dividend payments in 2020.

Mould continues: “The biggest increases in sterling terms are expected from British American Tobacco and RBS. In total, three of the ten biggest dividend hikes are forecast to come from banks (RBS, Standard Chartered and Barclays), two from consumer staples giants (BAT and Unilever) and one from asset manager and recent market joiner M&G.”

Dividend cover for 2020, however, looks slightly improved. Compared to 2019’s expected 1.62x, the index is forecast to have a dividend cover of 1.69x in 2020.

That, however, is still way below the 2x, the ideal level for dividend investors.

At the same time, Mould points out that dividend cover is lower than previously forecast. He says: “At this time one year ago, analysts were forecasting dividend cover of 1.79 times for 2020. But since then aggregate net income forecasts have dropped by £13.3 billion, or 5.6%, while aggregate dividend payment estimates have been cut by just £3.3 billion, or 3.5%.”

Across the whole index, companies have largely been reluctant to cut their dividend so far. Mould puts this down to companies being aware of the importance of dividends in today’s low-interest rate world and the need to accommodate investors looking for yield.

But, Mould warns: “Management must be careful that they are not over-paying and under-investing to curry short-term favour to the long-term detriment of their business’ competitive position and therefore its ability to generate cash and offer dividends.”

Top 10 dividend payers
At the same time, the companies with the 10 largest forecast yields have an even lower dividend cover, an expected 1.44x.

Of the ten largest dividend payers, only M&G has a dividend cover ratio above 2x. The second-best dividend cover is Aviva, at 1.84x.

According to Mould, “The lowly earnings cover partly reflects the lofty expected pay-outs at a trio of house builders, Taylor Wimpey, Barratt Developments and Persimmon. The good news is that all three have net cash balance sheets with which to reassure shareholders, even if earnings cover looks lower than ideal.”

Standard Life Aberdeen has the worst forecast dividend cover, at 0.87x. A dividend cover below 1x means a company has to fund part of its dividend payments with something other than earnings – typically debt.

Dividend yield (%) Dividend cover (x)
Imperial Brands 12.2% 1.32 x
Taylor Wimpey 10.6% 1.11 x
Evraz 10.5% 1.55 x
Persimmon 9.3% 1.14 x
M & G 8.5% 2.09 x
Aviva 8.2% 1.84 x
British American Tobacco 7.5% 1.53 x
Standard Life Aberdeen 7.1% 0.87 x
HSBC 7.1% 1.38 x
Barratt Developments 7.1% 1.54 x
AVERAGE 8.8% 1.44 x


Why does dividend cover matter?
A key indicator of dividend sustainability is dividend cover. This is considered an important metric in assessing whether a company is in a healthy position to distribute the level of dividends it proposes to. The metric is calculated by dividing earnings per share by dividend per share.

As a rule of thumb, a low dividend cover score – of around one times or lower – suggests that dividends are vulnerable, as the company is using most, if not all, of its profits to fund its dividends. A figure of two or more times is viewed as comfortable, because it is a sign that a business is not over-distributing.

spud

[rathlindri] 19/12/2019 10:58

UBS target of 340 looking perfectly feasible now

[wtacraig1] 19/12/2019 09:32

Price ticking up nicely

[spud] 13/12/2019 11:24

Woodford Income Focus to be taken over by Standard Life Aberdeen two months after it was suspended
By DAILY MAIL CITY & FINANCE REPORTER
PUBLISHED: 21:51, 12 December 2019 | UPDATED: 21:51, 12 December 2019



Aberdeen Standard Investments is about to take on the beleaguered Woodford Income Focus fund, two months after it was suspended.

The City investment firm, part of Standard Life Aberdeen, is close to sealing a deal to take over the £244million fund, financial information group Citywire reported.

The Income Focus fund, a smaller sister to Neil Woodford's £2.9billion flagship Equity Income fund, froze investors' money in October after the failed fund manager quit before he could be fired.

Link Fund Solutions, which oversees the management of the crumbling Woodford empire, ordered the suspension, fearing that too many investors would try to pull their money out and cause the Income Focus fund to run out of cash.

Link has since been trying to find a new manager to take over from the 59-year-old, or arrange a merger with a rival fund.

spud

[spud] 11/12/2019 15:13

Interesting:



spud

[samwn1] 11/12/2019 13:00

Does the Chinese Investor work there?

[spud] 11/12/2019 12:12

FWIW:

StockMarketWire.com - Credit Suisse today reaffirms its neutral investment rating on Standard Life Aberdeen [LON:SLA] and raised its price target to 320p (from 270p).

spud

[fionascott1234] 10/12/2019 12:26

Tell CS & UBS not to raise their targets again if they have this effect!

[cwa1] 10/12/2019 08:09

FWIW:Stan Life M/P CS raise TP from 270p to 320p, reiterate Neutral

[mcunliffe1] 06/12/2019 13:42

I liquidated my property funds six months ago as I watched INTU descend.

[mcunliffe1] 05/12/2019 09:26

Good question samwn1. Instead of buying their own shares over the past year the management should have bought MORE HDFC AMC.

[samwn1] 05/12/2019 09:10

Why sell an asset that has "surged 90% in value since its 2018 debut" only to support a buy-back?

[spud] 29/11/2019 12:52

Good news for SLA:

Phoenix Group generating more cash than expected


Industry consolidator Phoenix is using the cash to bankroll a dividend yield of over 6%.

Trading update

Chief executive Clive Bannister said:

"This trading update further reinforces Phoenix's conviction in its business model and its capacity to generate Cash, deliver Resilience and exploit multiple avenues of Growth to deliver long-term sustainable cash generation, not just today but in the years ahead. We continue to place customers at the heart of what we do and are committed to delivering a high level of customer service and to improving customer outcomes.”

ii round-up:

Life and pensions industry consolidator Phoenix Group (LSE:PHNX) reported reassuring trading in this update ahead of its December year-end.

Cash generation of £707 million for the full year 2019 exceeded management’s prior target of £600 to £700 million and was up from the £664 million generated in 2018. Cash generation is a measure of cash and cash equivalents remitted by its subsidiaries to the holding company and is available to cover dividends, debt interest, debt repayments and other items.

Tracing its roots back to 1786, Phoenix has around 10 million policyholders and £245 billion of assets held by its various life companies, including the 2018 acquired Standard Life Assurance business and its ongoing strategic partnership with Standard Life Aberdeen (LSE:SLA).

It remains on track to deliver a £1.2 billion total synergy target for the Standard Life businesses transition, which management noted was progressing to plan.

The share price rose by more than 1% in early afternoon UK market trading.

ii view:

Intense competition and pressure on life and pensions providers to reduce costs has allowed Phoenix to grow via acquisitions and then strip costs. Pearl Assurance and Abbey Life are now both part of Phoenix.

The rising cost of providing staff pension schemes has also seen many companies closing and then offloading their obligations to outside entries such as Phoenix. A £1.1 billion buy-in from the PGL Pension Scheme provides a recent example.

For investors, a prospective dividend yield of over 6%, not guaranteed, offers appeal and, while Brexit and its potential impact on both its UK and Irish businesses generate some uncertainty, the shares have been chased to new highs.

Positives:

On track to deliver its synergy target for its Standard Life acquisition
Attractive dividend payment
Negatives:

Facing Brexit uncertainty
Phoenix may fail to make further value adding acquisitions
The average rating of stock market analysts:

Buy

spud

[ramellous] 28/11/2019 07:22

Positive update from Phoenix group today of which SLA have a 20% stake. Their recent share price chart seem to be mirroring Phoenix.

[nico9] 28/11/2019 07:14

Spud. Thanks for the dividend link

[mcunliffe1] 27/11/2019 19:01

C.I., well done.

You had a ready and willing buyer of course in the form of SLA and their share purchase plan. If there are further sellers after the Jan 2020 end of the share buy-back I suspect the share price will fall.

I find it so frustrating that so many more shares were bought months ago for the same money being spent now as the shares have risen. I still maintain that a financial management company should have the ability (having made what I consider to be a bad decision) to purchase shares when the price is heading downwards rather than upwards.

If the reason for a share buy-back is to underpin the share price in a falling market....... then buy when FALLING.
If the reason is to scoop-up as many shares and cancel them to enable a static or rising dividend in a climate of reduced profit.......then buy when FALLING.
If the reason is to enhance directors remunerations in some manner......then task some outside agency to handle the purchase as they see fit and whack the share price up just in time for a £3.5m sale. Sod what happens after that.

I know, I'm cynical.

[chinese investor] 27/11/2019 17:27

I sold completely in three lots this morning.
I met my 2019 target so why not.

Good luck to all holders.

[mcunliffe1] 27/11/2019 15:11

Maybe C.I. IS out but feels it wasn't too soon lippy4.

[action] 27/11/2019 13:25

My entry point is 364p b4 the split. ?