If I’d invested £1,000 in Aviva shares 5 years ago, here’s how much I’d have now

How much would £1,000 invested in Aviva shares five years ago be worth now? Our writer looks at the stock’s performance and explores an unusual alternative.

| 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.

British pound coins in birds' nest

Image source: Getty Images

Key Points

  • Aviva shares have performed poorly over the last five years.
  • The company's dividend has helped generate positive returns for investors.
  • Aviva's preferred stock has produced better results than its common equity.

If I’d invested £1,000 in Aviva (LSE:AV) shares five years ago, I’d have had a disappointing time. But there is a way that I could have invested in the company that would have yielded better returns.

Aviva shares

Five years ago, the Aviva share price was 525.40p. For £1,000, I could have bought around 190 Aviva shares.

Today, the stock is around 429.60p. So from my initial £1,000, I’d have lost £180.90 through share price decline.

I’d have made some of that back in dividends, though. Over the last five years, Aviva has paid out 101.25p per share in dividends. So my 190 shares would have brought in £192.38 in dividends.

That would leave me with a positive total return of £11.48. Undeniably, I’d have made money. But I don’t think that this is a great return on a £1,000 investment made five years ago.

A better alternative

If I’d bought Aviva’s preferred stock, however, I’d have had better results. Five years ago, the price of Aviva’s 8.75% preferred shares – which trade on the London Stock Exchange under the ticker AV.A – was 156p. So for my £1,000 five years ago, I could have bought 641 shares.

Today, Aviva’s preferred stock has a share price of 143.25p. As such, I’d have lost £81.70 as a result of the declining share price. In other words, both the common stock and the preferred shares have declined over the last five years, but the common stock has declined by more. 

Aviva’s preferred stock comes with a preferred dividend. Over the past five years, the preferred stock has paid out 43.75p per share. With 641 shares, I’d have brought in £280.44 in dividends.

Overall, if I’d invested £1,000 in Aviva’s preferred stock five years ago, I’d have made £198.74. I still don’t see that as an amazing return on a £1,000 investment over five years. But I do think that it’s a better return than I’d have got from buying the common stock.

Preferred stock

There are other advantages to preferred stock as well. The dividend paid on Aviva common stock has been highly irregular. It’s been up and down a fair bit over the last five years, making it quite hard to predict for someone interested in using the dividend to generate passive income.

With the preferred stock, the story is different. Where the amount that the company pays out to holders of common shares is variable and up to management to decide, Aviva’s 8.75% preferred stock pays a dividend of 4.375p per share twice each year.

This dividend is fixed and management doesn’t have an option to lower it. It does have an option to decide not to pay the dividend in any year, but if it does this, then the dividend rolls over and the outstanding amount has to be paid in full before it can pay a dividend to common stockholders.


Over the past five years, Aviva’s preferred stock has outperformed the common equity. I don’t normally buy preferred shares, since they have a limited upside as well as a limited downside. But with Aviva shares having performed poorly over the past five years, I’d rather own the preferred stock today.

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 considered so you should consider taking independent financial advice.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Modern suburban family houses with car on driveway
Investing Articles

Should I snap up Taylor Wimpey shares at £1.30?

With the Taylor Wimpey share price down by almost 30% this year, should I snap up some shares while it's…

Read more »

Young female analyst working at her desk in the office
Investing Articles

How I’m finding shares to buy now – and keep for a decade

Our writer has been looking for shares to buy using an approach that looks both at long-term profit prospects and…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

What’s happening to the Petrofac (PFC) share price?

The Petrofac (LON:PFC) share price has had a seriously erratic year so far. I take a look at the latest…

Read more »

Young black woman in a wheelchair working online from home
Investing Articles

The Aviva share price is flying! Should I buy this 7% yield?

Despite recent gains, Roland Head thinks the Aviva share price could still be too cheap.

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

Here’s 1 passive income opportunity not to be missed!

This Fool details a passive income opportunity that could bolster his holdings, and the shares trading at cheap levels too.

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

The Legal & General share price is dirt-cheap with a juicy dividend yield!

Jabran Khan takes a closer look at the Legal & General share price which looks like an opportunity to boost…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

If I’d invested £1,000 in this top lithium stock 5 years ago, here’s how much I’d have now!

This lithium stock has gone from strength to strength over the past year. But has it flown too high, or…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A growth stock with a price-to-earnings ratio of just 9.7! Should I buy Yalla?

I'm generally not too keen on investing in dollar-demonated stocks at the moment. But Yalla, with its low price-to-earnings ratio,…

Read more »