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Now is the right moment to integrate into Aviva's stock market performance?
Today at around 426p, the stock has a forward price/earnings for 2019 of around 6. The forward dividends return is at 8% now. I wouldn't be surprised if we saw an upswing from this recent slump, but I still think that the longer-term outlook for equity prices, profit and dividends is far less appealing than it seems at first sight.
Earlier this week, it was announced that Mark Wilson would resign as CEO after staying until April 2019 to help with a "planned and ordered transition". "Aviva introduced Mr. Wilson in January 2013 to change the game. The company had previously run into difficulties since it had collapsed so severely after the credit crisis of the last decade, just like many other companies in the cycle.
In the press statement, Aviva said it had been redesigned under the direction of Mr. Wilson to "significantly improve" its overall fiscal efficiency and results. This concludes the turn-around business with Aviva. As of January 2013, the stock has been trading at around 14%, which appears to be a poor yield from a six-year turn-around.
One of the major problems was the declining valuations over the course of the year, which resulted in the price/earnings ratio becoming smaller and smaller and the dividends higher. However, I think it's common for large companies like Aviva to be large companies. As with the result, the dividends and stock prices fell again in 2008.
Motley Fool UK has no holding in any of these stocks.