AJ Bell reckons that while Standard Life Aberdeen’s (LON:SLA) latest results might offer some reassurance, investors remain in ‘a state of alert’ for a dividend cut, Proactive Investors reports. The comments came after the blue-chip asset manager updated investors on its full-year performance yesterday, posting flat profit and announcing that it was scrapping its co-chief executive structure, introduced after the merger between Standard Life and Aberdeen Asset Management.
Standard Life Aberdeen’s share price, which rallied yesterday, has extended the previous session’s gains, having added 2.03 percent to 255.90p as of 09:38 GMT. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.40 percent higher at 7,187.95 points.
AJ Bell weighs in on SLA
Proactive Investors quoted Russ Mould, investment director at AJ Bell, as commenting yesterday after Standard Life Aberdeen’s results that the group’s yield reflected the capital risks which investors believe come with holding shares in the asset manager, including a dividend cut.
“Investors had been bracing themselves for a cut from Aberdeen Asset Management before it welcomed Standard Life’s embrace and while today’s statement may offer some reassurance investors will still be on a state of alert,” the analyst pointed out, adding that “earnings cover for the dividend is thin and pressure on fees, from customers, competitors and the regulator alike, as well as ongoing fund flows, will not help in this regard”.
Mould reckons that “a sudden stock market lurch lower, hitting assets under management, would be a further challenge to the company’s near-term earnings power”.
Other analysts on group
Numis Securities reaffirmed Standard Life Aberdeen as a ‘buy’ yesterday, valuing the shares at 361p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 341.33p.