The Aviva (LSE: AV) share price has been a thing of wonder. The dividend has been pretty nifty too. Investors who held the FTSE 100 insurer and asset manager over the last five years will be delighted with their total return. So how long can the fun continue?
Over the last 12 months, Aviva shares have climbed 34.3%. Add in the trailing dividend yield of 5.4% and the total return hits 39.7%. That would have turned a £10,000 investment into £13,970, which isn’t bad in my book.
And it isn’t a one-off. Aviva shares are up 99% over five years, pushing the total return north of 130% once dividends are reinvested. It’s a great example of how FTSE 100 blue-chips can quietly build wealth and compete with much flashier growth stocks.
FTSE 100 financial hero
While most FTSE 100 financials have done well lately, few have done this well. One or two have lagged, notably rival Legal & General Group. Its shares are up just 12% over the last year and down 3% over five.
Much of the credit belongs to Amanda Blanc, Aviva group CEO since July 2020. She’s streamlined the business, selling non-core operations and refocusing Aviva on its core markets of the UK, Ireland and Canada.
By shedding weaker assets, it has lifted operating profits substantially. They rose 22% in the first half of 2025 to £1.07bn, driven by higher general insurance premiums and stronger inflows into its wealth business.
Acquisitions can unsettle investors, but markets welcomed last year’s £3.7bn takeover of Direct Line Group. It’s broadened Aviva’s product mix and revenue base, and added scale in general insurance.
Shareholders have shared in the success. Dividends have risen in each of the last five years, with a compound annual growth rate of 23.2%. That compares with an average growth rate of just 2.77% over the previous 15 years.
No dividend is ever guaranteed, but this one looks pretty secure. The forward yield for full-year 2025 is 5.8%, rising to 6.2% in 2026, suggesting further income growth ahead.
Dividends and growth
Success comes at a cost though, with the price-to-earnings ratio climbing to 29. However, the forward P/E looks more comfortable at 13.8, with earnings expected to continue growing.
So what do the experts say? Fifteen analysts publish one-year forecasts, producing a consensus share price target of 692.6p. If correct, that’s just 3.8% up from today’s 667p. Add the forecast yield of 5.8% and the total return comes to roughly 9.6%, turning £10,000 into £10,960. Respectable, but slower than recent years.
Forecasts are never reliable of course. Individual broker targets range from 543p to 760p. Eight analysts still rate Aviva a Strong Buy, eight say Hold and only one recommends selling. Yet it confirms my suspicions that excitement may cool from here.
Aviva is now well diversified, with general insurance, wealth management and life products balancing each other. That said, general insurance profits can be cyclical, and recent premium growth may ease. Any stock market wobble would also hit its wealth arm, through lower assets and inflows.
Aviva may pause rather than power on but I still think it’s well worth considering with a long-term view. I’d love to buy it in a stock market dip.
