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A rising share value sometimes means a falling dividend yield, within the absence of dividend progress. 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 buyers 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, equivalent 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 constantly ship.
That inconsistency was a part of the issue, although. Whereas it appeared to have the makings of a powerful enterprise, it didn’t at all times appear to capitalise on them successfully.
Have issues modified?
Dividend seems to be engaging
There are some combined indicators about whether or not the enterprise is on extra of a fair keel than it as soon as was. General, I believe issues are trying fairly good.
Within the first half of this 12 months, the corporate’s diluted earnings per share grew a really spectacular 48% 12 months on 12 months.
Nevertheless, adjusted internet working income slid 6% and internet flows have been adverse, that means extra money left the corporate’s funds than was put into them.
Seen positively, that may very well be an indication that the asset supervisor is taking a extra strategic strategy, 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 on monetary efficiency.
However I see administration’s dedication as a constructive signal that it’s focussed on the right way to preserve the shareholder payout.
Within the first half, paying abnormal dividends price Aberdeen £130m. That was amply lined by internet money flows from working actions of £241m.
One to think about
There may be a number of work nonetheless to be achieved to unlock the complete potential of the FSTE 250 agency, I reckon.
Nevertheless it has been getting its act collectively up to now a number of years and I believe that reveals via in its first-half profitability.
I additionally assume 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 reveals how far the corporate has fallen in some buyers’ favour.
Nevertheless it has well-known manufacturers, together with not solely Aberdeen itself but in addition the funding platform interactive investor. The corporate has a sizeable buyer base and has demonstrated that it may well generate sizeable quantities of extra money over time.
Taken along with its deal with sustaining its dividend on the present degree, I see this as an revenue share for buyers to think about.
