Is it time to take a further look at Aviva PLC (LSE:AV.) (LON:AV.), the insurer that has started to splash the cash?
According to the highly respected financials team at Deutsche Bank (NYSE:DB), absolutely yes it is – notwithstanding the 32% total return investors have seen in the year to date.
In the wake of the recent numbers, Aviva has provided “reassurance and clarity”, according to Deutsche, which remains a ‘buyer’ of the stock up to 500p (current price 420p).
Its analysts were heartened by the £4bn capital return pledged by mid-2022 and the assurance the figure was “floor not a ceiling”.
That capital return is kicking off with a £750mln stock repurchase scheme.
Details on the rest of the cash return pledge will be unveiled in the group’s full-year results.
The interim results last week were a mixed bag. However, there was nothing in them that deterred the Deutsche number crunchers.
“We believe Aviva continues to offer highly attractive value - both in absolute terms (offering a free cash flow yield in 2023e of 11.2%) and even relative to its somewhat oversold UK peers (typically on sustainable cash flow yields of more like 8%),” the bank said in a note to clients.