Aviva Share Price Forecast: How Safe is the AV Dividend?

Aviva share price has had a difficult performance in 2022 as concerns about the company’s business remain. The stock crashed to a low of 381p in June, which was about 37% below the highest level this year. It was trading at 437p, which is about 15% above the lowest level this year, giving it a market cap of over 12 billion pounds.

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FTSE100

FTSE100 (7052.2)

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6835

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6700

How safe is Aviva’s dividend?

Aviva is a leading British insurance company that has a strong market share in the country. It operates its company through its key brands like UK & Ireland Life, UK & Ireland General Insurance, Canada General Insurance, Canada General Insurance, and Aviva Investors. In the past few years, the company has exited some of its non-core markets like Vietnam, Italy, Poland, France, and Turkey. Aviva Investors has over 232 billion pounds in assets under management.

Most Aviva investors hold their stake due to the company’s dividend. In the most recent earnings report, Aviva declared a dividend of 10.3p, which was about 40% higher than what it offered in the previous period. As a result, the company now has a dividend yield of 6.85%, which is higher than the 10-year Gilt yield of about 3.3%. Still, this return is substantially lower than the UK’s annual inflation of near 10%. The company also recently announced a share buyback program.

Aviva’s dividend is relatively safe as its business fundamentals improve. Inflows into its investment division have been rising while its profitability is growing. Most importantly, the company has an excellent credit rating, meaning that its dividend is safe. S&P Global has a rating of A while Moody’s, A.M Best, and Fitch have a rating of A2, A, and A+.

Aviva share price forecast

The daily chart shows that the AV share price has been bouncing back in the past few weeks. It has managed to move above the 25-day and 50-day moving averages. The Money Flow Index (MFI) moved slightly above the neutral level. However, it has struggled to fill the gap that it formed in May. 

Therefore, the stock will likely remain in this range in the coming days as investors wait for the next catalyst. This could come on Thursday when the Bank of England (BoE) is expected to hike interest rates by another 0.50%.

aviva share price