What Will Results From Prudential plc, Aviva plc And Old Mutual plc Bring This Week?

Will results from Prudential plc (LON: PRU), Aviva plc (LON: AV) and Old Mutual plc (LON: OML) thrill the crowds?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Shares in Prudential (LSE: PRU) have lost 19% in the past 12 months, to 1,327p. That surprises me as the City’s analysts are expecting Wednesday’s full year results to show a 14% rise in earnings per share (EPS), which would put the shares on an undemanding P/E of 12.3. The Pru’s dividend is likely to yield only around 3%, which is lower than some of its rivals — but at nearly 2.8 times, the dividend cover is about the best in the business.

The company’s exposure to Asia might be partly behind the share price slip. But for the nine months to September 2015, Prudential revealed a 24% increase in new business profit from the region, helping spur a 13% rise in new business profit overall. An upbeat Mike Wells, chief executive, said: “We remain optimistic about the outlook across the Group, particularly in Asia where the compelling long-term fundamentals of the region are unchanged“.

Prudential, as a byword for a long-term cautious approach, is well named. I really can’t see any surprises coming with Wednesday’s results, and I expect forecasts to be pretty close to the mark. Analysts have Prudential on a pretty solid buy consensus and I agree.

Bigger dividend

Aviva (LSE: AV), whose full year results are due on Thursday, is offering an altogether meatier dividend with a yield of 4.4% on the cards as it recovers from being slashed as a result of the financial crisis. That’s after the shares fell 17% in 12 months to 462p, and forecasts have the dividend rising to 5.1% this year, and then 6% in 2017. Cover by earnings would stand at around 1.9 times, which is quite a bit less than Prudential’s but still seems solid enough.

The first nine months of 2015 saw the value of Aviva’s new business boosted by 25%, and the company saw new capital inflows of £2.2bn to take its funds under management to £7.3bn. With the acquisition of Friends Life apparently going well, and with chief executive Mark Wilson speaking of “£91m of savings against our target of £225m“, I reckon Aviva’s post-crunch turnaround plan is delivering the goods.

With another hefty buy consensus from the City, I think Thursday’s results are unlikely to disappoint.

Even bigger dividend

Unlike the previous two, Old Mutual (LSE: OML) has relatively slow EPS growth forecast, and that’s left its shares on the lowest P/E multiples too, just 9.5 for the year just ended and dropping to 8.9 on 2017 predictions. But the dividend, to be announced on Friday, is expected to yield 5.1% with the shares priced at 192p. Cover by earnings should be strong, at a little over two times.

The weakness of Old Mutual shares is down to its more considerable exposure to developing markets and to its ownership of South Africa’s Nedbank (and the South African economy is not at its strongest). But a Q3 update told us that Old Mutual Emerging Markets was up 8% to £2.6bn, while Old Mutual Wealth had gained 45% to £5.5bn. Net inflows came to £1.6bn, so it does look like the market’s fears are exaggerated.

The pundits have a bullish buy rating out on Old Mutual, and I’m with them once again. I see a tempting long-term prospect, and I’m not too worried about shorter-term emerging markets fears.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft owns shares in Aviva. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

2 ways to make money from a stock market crash

This writer's not spending time trying to guess when the next stock market crash will be. Instead, he's getting ready…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

How this rocketing FTSE 250 stock is tapping into the billionaire-making AI revolution

As the AI revolution mints new billionaires, this high-flying FTSE 250 company has been making its shareholders wealthier too.

Read more »

Investing For Beginners

4 actionable stock market investing habits that can boost my profits

Jon Smith looks at the stock market and explains how he picks the right shares to buy, running through a…

Read more »

Investing Articles

The Standard Chartered share price leaps on FY dividend and buyback news. Time to buy?

An 8% jump for a UK-listed bank on 2023 results? That's what just happened to the Standard Chartered share price.…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Can Lloyds shares get any cheaper?

Lloyds shares have fallen further following the release of the bank's 2023 results. This Fool senses now is a time…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

£7,000 of money to spare? Here’s how I’d aim to turn that into £1,000 in annual extra income

Christopher Ruane explains how he would aim to generate a four figure income to cushion his future, all with dividend…

Read more »

British union jack flag and Parliament house at city of Westminster in the background
Investing Articles

Is this stellar dividend growth stock the only no-brainer buy on the entire FTSE 100?

Picking shares requires careful thought and analysis, but this FTSE 100 growth stock appears to be pressing all the right…

Read more »

Investing Articles

I bought 422 Glencore shares in July and 232 in September. Here’s what they’re worth now

Glencore shares have had a rough ride leaving Harvey Jones out of pocket. Should he cut his losses or average…

Read more »