James Gard: Welcome to Morningstar. Making its stock of the week debut is abrdn, formerly known as Standard Life Aberdeen.
It’s been a strange year for shareholders in the Edinburgh-based investment company, whose divisions span asset management, pensions and now platforms after the purchase of Interactive Investor last year.
Asset managers have been out of favour this year and any have seen outflows, as we’ve reported elsewhere. abrdn's shares have been under pressure, attracting the attention of short sellers. In a further blow, it was demoted from the FTSE 100 in late summer.
But there’s been a pivot in the last few weeks and months. We seem to be now in a "risk on" mode which helps stocks like Aberdeen, which is known for its emerging markets and smaller companies funds. A share buyback announced in the summer helped boost shares. Now the stock is up 40% in the last month as investors rediscover their risk appetite – and maybe expect more positive surprises on returns.
Really this week is about income so let’s look at that: abrdn yields around 7%, much higher than the market average. Its payouts have been relatively predictable since the pandemic. Since 2020, the company has paid 7.3 pence for an interim and 7.3 pence for a final dividend.
Recently there’s been talk that Aberdeen is planning to boost its shareholder distributions this year, but that’s as yet unconfirmed. So it’s a question of watch this space.
For Morningstar, I’m James Gard.
