All of a sudden, investors are falling over each other to buy Aviva (LSE: AV) shares. Yesterday (20 May), the FTSE 100 insurer and asset manager was the most bought stock on the AJ Bell platform. And by a million miles.
It captured an impressive 28.75% of buys on the platform, one of the biggest leading margins I’ve seen. So why is Aviva all the rage?
My first thought was it must have just delivered an expectation-smashing set of results, but it didn’t. The last set was its Q1 trading update, posted on 14 May, which continued its strong run.
Why do investors love this FTSE 100 company?
Aviva’s General Insurance premiums rose 19% to £3.4bn, boosted by 26% growth in UK & Ireland following the inclusion of recent £3.7bn Direct Line acquisition. Wealth net flows rose a stunning 49% to £3.3bn, as higher wages boosted workplace pension contributions.
Health premiums grew at a more modest place, while retirement sales fell 35% to £1.1bn. Aviva’s Solvency II shareholder cover ratio, which reflects balance sheet strength, slipped from 180% to 171%. However, that reflects £1.74bn of the Direct Line purchase being funded by cash.
The board’s paused share buybacks for now, but they should return at some point. Between 2026 and 2028, Aviva expects to generate more than £7bn of free cash.
The Aviva share price has had a terrific run, rising 55% over the last five years. But it’s slowed lately. Over the last 12 months, it’s up just 3.75%.
Its solid performance reflects decent profit growth over the last five years:
- 2025 – £2.203bn
- 2024 – £1.767bn
- 2023 – £1.467bn
- 2022 – £1.350bn
- 2021 – £1.630bn
The dip in 2022 was down to major IFRS 17 accounting rule changes, the inflation-fuelled spike in claims costs, and volatile financial markets.
Is now a good time to buy this stock?
Aviva’s also paid some handsome dividends. The board has lifted shareholder payouts at an average rate of 13.35% a year over the last five years. Dividends are never guaranteed, but with luck and careful management, that should continue. The forward yield for 2026 is 6.77%, rising to 7.23% in 2027.
So there are clearly good reasons to buy Aviva, but why the sudden surge?
The only real news event I can see is a positive report by RBC Capital Markets, which praised Aviva’s solid performance, especially in motor insurance growth and wealth management. The broker maintained its Outperform rating with a 770p price target. If correct, that’s an increase of almost 25% from today’s 617p. Again, this isn’t guaranteed.
Every stock has risks, of course. Inflation’s climbing, which could drive up motor repair and claims costs, while rising unemployment and slowing wages could hit workplace pension contributions. Also, the shares could idle after their strong run.
But I still think Aviva looks like one of the most compelling opportunities in the FTSE 100, and investors are right to consider it. I’d like to join them, ideally at a lower valuation. If the stock market crashes this summer, it will be high on my shopping list.
Should you invest £5,000 in Aviva Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva Plc made the list?
Harvey Jones does not hold any positions in the companies mentioned.
