Investors in Aviva (LSE: AV) have witnessed remarkable performance over the past year. The share price appreciated by 34.3%, providing a total return of 39.7% when combined with a dividend yield of 5.4%. This means a £10,000 investment would have grown to £13,970.
Impressive Long-Term Growth
Over the last five years, Aviva shares have surged by 99%. This growth translates into a total return exceeding 130% when dividends are reinvested. Aviva exemplifies how established FTSE 100 companies can deliver consistent wealth creation.
Strong Financial Performance
Among FTSE 100 financials, few have matched Aviva’s success recently. The company’s CEO, Amanda Blanc, who took the helm in July 2020, has played a pivotal role in this turnaround. She implemented strategic changes, focusing on core markets in the UK, Ireland, and Canada.
- Operating profits rose by 22% in the first half of 2025, reaching £1.07 billion.
- This increase was fueled by higher general insurance premiums and robust inflows into its wealth management sector.
- Aviva’s acquisition of Direct Line Group for £3.7 billion in 2024 expanded its product offerings and market reach.
Consistent Dividend Growth
Shareholders have benefited significantly, with dividends increasing annually for the last five years, reflecting a compound annual growth rate of 23.2%. This growth stands in stark contrast to the previous 15-year average of just 2.77%.
Attractive Dividend Forecasts
The forward yield for full-year 2025 is expected to be 5.8%, with an increase to 6.2% in 2026. While dividends are never guaranteed, their current trajectory appears assured.
Market Analysts and Future Projections
The consensus among fifteen analysts suggests a one-year price target of 692.6p for Aviva shares. This represents a potential increase of 3.8% from the current price of 667p. Including the anticipated yield of 5.8%, the overall return could reach approximately 9.6%, equating to a £10,000 investment growing to £10,960.
- Broker target ranges vary from 543p to 760p.
- Ratings include eight Strong Buy, eight Hold, and one Sell recommendation.
Potential Risks and Considerations
While Aviva’s diversification across general insurance, wealth management, and life products is a strength, it also introduces certain risks. General insurance profits are cyclical, and the pace of premium growth may decrease. Additionally, market fluctuations could impact its wealth segment through reduced assets and inflows.
Despite these challenges, Aviva remains an intriguing option for investors who favor long-term potential. A market dip could present a favorable buying opportunity for those looking to capitalize on its continued growth.
