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Aviva(*12*)‘s (LSE:AV.) share price has loved blistering good points over the final yr. Buyers have obtained a juicy complete return of 32.3%, together with a rising dividend. However what does that imply in phrases of chilly, arduous money?
Since 5 February, 2025, Aviva shares have risen 26.6% in worth, whereas its trailing dividend yield for the interval is 5.7%. It means a £10,000 funding again then would have changed into £13,320 right this moment.
By comparability, the broader FTSE 100(*12*) would have delivered a decrease (if nonetheless stable) return of £12,370. The query is, can the celebration over at Aviva proceed?
What do the consultants assume?
Metropolis analysts are assured Aviva’s share price can hold rising. Eighteen of them presently fee the FTSE inventory, and their common 12-month price goal is 697.2p, up 7.9% from right this moment’s ranges.
That’s far beneath the development buyers have loved over the final yr. And it appears to have one thing to do with the insurer’s present valuation. At 646.4p, its ahead price-to-earnings (P/E) ratio is 11.1 occasions, which — though not excessive on paper — continues to be above the 10-year common of seven.2.
Based mostly on these forecasts, Aviva shares could nonetheless ship a terrific return throughout the subsequent 12 months. The corporate’s ahead dividend is 6.4%, which means — if all goes nicely — a £10,000 funding right this moment would turn out to be £11,430 by February 2026.
What could go fallacious?
Aviva faces a sequence of challenges that could impression investor returns over the subsequent yr. Its share price could disappoint if, as an example, shopper spending in its key UK market stays underneath stress, hitting earnings. Persistently excessive claims inflation could additionally injury efficiency, and significantly at its normal insurance coverage unit.
Regardless of this, I consider Aviva is a good inventory to think about. Metropolis analysts are additionally largely constructive on the FTSE agency, with 10 score it as a Robust Purchase or Purchase. Seven reckon it’s a Maintain, with only one saying it’s a Robust Promote or Promote.
Will Aviva’s share price rise?
Aviva is one among the core holdings in my very own portfolio, so I’ve shared in these wonderful returns over the previous yr. However I purchased it with a view to carry it for the lengthy haul. I feel its sturdy model energy, numerous product vary, and deep steadiness sheet put it in nice form to capitalise on the booming monetary companies market.
I particularly like the firm’s give attention to capital-light companies. This offers it good money era that it could actually use to distribute to shareholders in dividends, make investments in the enterprise, or pursue bolt-on acquisitions for development.
Following its acquisition of rival Direct Line final yr, a formidable 70% of working revenue will finally come from capital-light companies. That’s up from 56% in 2025.
So what can we anticipate in the subsequent 12 months? Dangers stay, however the agency’s resilient efficiency in 2025 fills me with optimism. On steadiness, I’m anticipating one other sturdy rise in Aviva’s share price and its dividends.
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