Boston, MA 03/13/2014 (wallstreetpr) – Aviva Plc (ADR) (NYSE:AV) is involved in the business of providing insurance products and services like long-term insurance and savings, general insurance and fund management. The company has its operations spanning North America, Europe and Asia Pacific.
The company has had very impressive stock price rebound. Having fallen heavily on the news of dividend-cut, the stock is back strongly and continues to be dominated with positive news.
In the last trading session shares of Aviva Plc (ADR) (NYSE:AV) rose 0.06 percent to $17.37. Earlier in the day the shares escalated to $17.49, marking the highest intraday price level on large volume of share changing hands.
Cutting dividend
Aviva Plc (ADR) (NYSE:AV) trimmed its dividend a year ago and the stock suffered massively as one would expect. But the shares are now full of strong performance, going up more than 70 percent in less than one year.
Aviva Plc (ADR) (NYSE:AV) presents a combination of trimmed dividend and significant price growth and at this juncture one might wonder whether there is anything good in here? Typically great stocks are known to come with both strong stock performance and growing dividend. Yet, there are good reasons to trust that Aviva Plc (ADR) (NYSE:AV) is still a good play even though its current stand show not-so-good dividend yield.
Dividend payout
Aviva Plc (ADR) (NYSE:AV) typically has a conservative look at dividend it pays out to shareholders. You find that the company keeps about two-thirds of its profits and only gives out one-third as dividend – so the issue is not about lack of money to give out. While this practice has been going on for some time, the company seems to be making consideration to reduce the amount of profit it retains and instead increase the profit portion going to shareholders as dividend.
If this is done, then of course the current yield at 2.9 percent will be able to go up and Aviva Plc (ADR) (NYSE:AV) would no doubt enter the zone of super income play, bearing in mind that its stock performance doesn’t seem to be under short-term threat. With a modest growth in dividend yield, say 3.5 percent over the next year or two, the stock will be a perfect combination for investors who want more.
Bottom line
By most measures, Aviva Plc (ADR) (NYSE:AV) is an attractive income play. The stock price is trending nicely and the prospects of increasing dividend yield all come as a reward package.
