Aviva: Strategy May Continue To Deliver Strong Results (Rating Downgrade)

Retirement Pot2.01K FollowersFollow5ShareSavePlay(8min)CommentsSummaryAviva has executed a successful U.K.-focused strategy, divesting non-core assets and acquiring Direct Line to strengthen its market position.Operational performance has improved, with rising profits, strong solvency, and increased cross-selling, supporting a 5.6% dividend yield above the FTSE 100 average.Dividend growth is expected to slow to low-to-mid single digits per share, as the Direct Line acquisition increased the share count by 14%.I now rate AVVIY a 'hold' due to valuation concerns, with a 30x P/E and 2.2x price-to-book ratio reflecting much of the recent operational progress. Jacek Politowski/iStock Editorial via Getty Images The U.K.’s largest insurer, Aviva (AVVIY), has a mixed performance record over the long term (and its antecedent companies predate the existence of the U.S.A., so a long-term view is possible), but it has beenThis article was written byRetirement Pot2.01K FollowersFollowI am a private investor based in the United Kingdom and most interested in equities in the U.K., U.S., Canada and Norway.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.