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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 traders to think about 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, corresponding to a big buyer base and a transparent worth proposition. Its enterprise mannequin had confirmed it may do nicely even when it didn’t at all times persistently 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 appears engaging
There are some blended indicators about whether or not the enterprise is on extra of a good keel than it as soon as was. General, I feel issues are trying fairly good.
Within the first half of this yr, the corporate’s diluted earnings per share grew a really spectacular 48% yr on yr.
Nevertheless, adjusted web working income slid 6% and web flows had been unfavorable, that means extra money left the corporate’s funds than was put into them.
Seen positively, that might be an indication that the asset supervisor is taking a extra strategic method, centered 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 rely upon monetary efficiency.
However I see administration’s dedication as a optimistic signal that it’s focussed on the best way to preserve the shareholder payout.
Within the first half, paying unusual dividends value Aberdeen £130m. That was amply coated by web money flows from working actions of £241m.
One to think about
There may be numerous work nonetheless to be completed to unlock the complete potential of the FSTE 250 agency, I reckon.
But it surely has been getting its act collectively up to now a number of years and I feel that exhibits by means of 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 exhibits how far the corporate has fallen in some traders’ 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 may possibly generate sizeable quantities of extra money over time.
Taken along with its give attention to sustaining its dividend on the present degree, I see this as an earnings share for traders to think about.
