But this scenario is not a surprise given the financial leviathan’s recent share price stampede — Standard Life’s stock value has advanced 16% over the past two months and hit two-year tops just shy of 450p late last week.

The company, which is due to merge with Aberdeen Asset Management imminently, announced today that assets under administration edged 1% higher between January and June to £361.9bn. This was despite the business enduring net outflows totalling £3.7bn in the period.

The asset manager saw fee-based revenues rise 5% in the first half, to £836m. And operating pre-tax profit advanced 6% year-on-year to £362m. “Standard Life has delivered a strong performance in the first half of 2017,” chief executive Keith Skeoch commented.

“We continue to see the benefits of targeted investments to further our diversification agenda, the success of our newer investment solutions and the ongoing focus on operational efficiency,” he added. “This has allowed us to grow assets, profits, cash flows and returns to shareholders.”

Merger adds extra star power

With the tie-up with Aberdeen Asset Management slated for completion in mid-August, Standard Life declared that “we are ready to accelerate the pace of strategic delivery as we open the next chapter of our transformation to a diversified world-class investment company.” The merger should give the enlarged entity greater scale and better diversification in what is an increasingly-competitive industry.

The City expects Standard Life to report earnings growth of 45% this year and 9% in 2018, resulting in a cheap forward P/E ratio of 14.9 times as well as a bargain PEG reading of 0.3. And the FTSE 100 giant also provides plenty for dividend chasers to shout about, the business sporting monster yields of 4.8% and 5.2% for this year and next.

Diversification pays off

I believe RPS Group (LSE: RPS) is another stock in great shape to deliver phenomenal long-term earnings expansion.

But investors need not wait for the company to deliver stonking growth, with City brokers predicting a 25% bottom-line rise in 2017. And a further 12% swell is anticipated for next year.

RPS Group, like Standard Life, has been no stranger to rampant investor demand in recent sessions either, the stock charging to three-year peaks around 280p late last week. Despite this the firm still deals on a very-reasonable P/E ratio of 15.8 times, while it also sports a mega-low PEG ratio of 0.6.

Investor faith in the Oxfordshire firm was rewarded last week when it spoke of a 35% uptick in pre-tax profit during January-June, at £27.2m. Despite ongoing pressure in the oil and gas industry, RPS Group’s efforts to diverse its operations are paying off handsomely. And I am confident ongoing progress in this area, allied with stringent cost management, should keep sending earnings skywards.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The financial goliath sources around half of profits from the life insurance sector, but is looking increasingly towards the asset management industry to deliver future growth.

Some have raised eyebrows at its decision to link with Aberdeen, with severe economic turbulence in developing markets more recently prompting investors to pull their cash out of the Scottish business en masse. But I reckon Standard Life’s merger  could pay off as, over a longer time horizon, the combination of booming population levels and rising personal wealth levels makes Asia an attractive destination for forward-thinking investors.

Besides, Standard Life and Aberdeen have identified £200m worth of cost synergies (to be achieved by 2020) which should give earnings another encouraging kick.

Plenty of upside

And in the meantime, City analysts expect Standard Life to put to bed the extreme earnings volatility of recent years.

For 2017 an expected 57% earnings charge is predicted, building on the 39% rise enjoyed last year. And the insurer is expected to keep the momentum up with a 7% bottom-line uptick in 2018.

Current Square Mile forecasts make Standard Life exceptional value for money too, a forward P/E ratio of 12.3 times falling comfortably below the FTSE 100 forward average of 15 times.

But it is Standard Life’s dividend profile that should really attract investors, in my opinion. A predicted 21.4p per share dividend for this year yields a staggering 5.9%, while an anticipated 23p reward for 2018 drives the yield to 6.4%.

With the Aberdeen merger set to boost Standard Life’s product range considerably, and with it future earnings growth, I expect the enlarged group to deliver stunning investor returns in the years ahead.

A wise investment

I also believe Hargreaves Lansdown (LSE: HL) is a hot growth bet as savers seek to protect themselves from rising inflation.

You see, with the increasing cost of living steadily eroding the value of cash, those stashing away for a rainy day are increasingly seeking alternatives to the rock-bottom interest rates offered on bog-standard savings accounts. And Hargreaves Lansdown’s broad range of services puts it at the front of the queue for those looking to invest wisely.

So just like Standard Life, Hargreaves Lansdown is also expected to enjoy handsome earnings growth during the medium-term at least, City analysts forecasting expansion of 15% and 13% in 2017 and 2018 respectively.

And I believe the investment manager is a wise stock selection despite an elevated forward P/E multiple of 31.5 times. Over the long term I believe Hargreaves Lansdown should prove a profitable growth share returns as private investor activity keeps on surging (assets under administration stood at a record $70bn as of December), helped by the structural opportunities created by an ageing populace.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management and Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve been looking at the FTSE 250 this week, and here are three dividends I see as tempting now.

Construction bargain

Carillion (LSE: CLLN) shares are still suffering from the construction industry’s hammering at the hands of the Brexit result, and after a two-year fall of 32% to 225p, we’re looking at a forward P/E of under seven for this year and next.

There’s some basis for the pessimism as Carillion had been through a tough patch way before the referendum. But earnings over the next two years are predicted to be flat — and there are dividend yields of around 8.5% on the cards. Still, 2016 results showed an 8% fall in the firm’s order backlog plus probable orders, and revenue visibility for the current year is down from 84% a year ago to 74%.

That could put pressure on earnings and on the dividend. But I reckon there’s room for a cut while still providing a decent yield, and I see the shares as oversold. It’s a time of maximum pessimism, and I reckon that’s the time to buy.

Talking back

In the aftermath of the hacking scandal at Talktalk Telecom Group (LSE: TALK), I saw the shares as firmly in bargepole territory — it was the kind of data breach that could have killed a company.

But memories seem to be short and the firm has new chief executive and chief operating officers coming soon in the shape of old hands Tristia Harrison and Charles Bligh respectively. Addressing falling customer numbers is also bearing fruit and the churn rate is falling. I think 2017 could end up being an impressive turnaround year.

Meanwhile, with the share price still being punished for past troubles — it’s down 47% over two years to 181p — the dividend forecast for March 2018 would yield 7.2%. That would actually be a cut from the uncovered 8.6% predicted for this year and would still be only thinly covered, but the earnings recovery from 2015’s low looks to be gathering pace, and I now see Talktalk as an attractive long-term income investment.

Cash from cash

I’ve liked the look of Aberdeen Asset Management (LSE: ADN) for some years now, and its falling share price has been making it look increasingly attractive. Forecasts put the shares, priced at 266p, on a forward P/E for the year to September 2017 of 13, dropping to 12.5 a year later. And there are tempting dividends pencilled-in of 6% this year and 6.1% next.

The big recent news is that the boards of Aberdeen and Standard Life are discussing a possible merger of the two companies, so Aberdeen might have already paid its last dividend as an independent firm. But if it comes off, I see it as a positive move. 

The result would be the UK’s largest independent asset manager, and Aberdeen shareholders would benefit from the more diversified nature of the combined beast — Aberdeen’s shares are being held down partly because of its Asian exposure.

And Standard Life itself has dividend yields of 5.6% and 6% forecast for this year and next.

The post 3 FTSE 250 stocks I’d buy with dividends yielding more than 6% appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

As to the proposed deal itself, there will be no cash changing hands, much to the chagrin of Aberdeen shareholders who have seen the value of their holding shrink by more than 35% since hitting highs in April 2015. The deal will instead be all-share, with Standard Life shareholders owning 66.7% of the combined company. For Aberdeen shareholders this would work out to 0.757 new Standard Life shares per Aberdeen share currently owned.

A stroke of genius or folly?

While I generally have a sceptical attitude towards mega-mergers or colossal acquisitions, this deal does on the face of it make considerable sense. Aberdeen’s share price has been hammered over the past two years due to 15 straight quarters of net outflows from its funds, which are heavily skewed towards Asian and emerging market equities that have fallen out of favour with investors. This has put pressure on profits and dividends, but combining with the relatively healthier Standard Life would relieve some of this pressure in the short term.

For Standard Life the deal would considerably bulk up its fund management operations as it tries to shift itself away from a pure life insurer to more of a fund manager. Both businesses will be highly complementary as well, with Aberdeen’s core expertise in emerging market equities and Standard Life’s in fixed income.

A plan for the future  

Looking several years out the thesis behind the deal also passes the eye test. Active managers have been punished in recent years by the shift towards passive investing and an increased awareness on fees from investors of all stripes from mom and pop retail investors to massive pension funds and Warren Buffett.

This has put incredible downward pressure on fees across the industry and although this deal wouldn’t completely alleviate this problem, it will allow the combined firm to protect its margins through cost-cutting. Analysts reckon that around 10% of the combined company’s 9,000 strong workforce could be shown the door.

Job cuts, efficiencies of scale and being able to offer prospective investors a wider range of in-house fund options is just what both companies need to compete against American giants like Blackrock in this new cut-throat environment. It’s still uncertain whether this deal alone will be enough for the combined Standard Aberdeen to thrive in the tough years ahead. But it definitely improves their odds.

With both firms’ shares trading relatively cheaply at under 14 times consensus forward earnings, investors who have a more bullish view than I on the fate of active managers may find this an interesting point to begin a stake in either company.

The Motley Fool’s method for making a million

The post What do Aberdeen Asset Management plc and Standard Life plc merger talks mean for investors? appeared first on The Twelfth Magpie.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Boring but brilliant

At first glance, kitchen supplier Howden Joinery (LSE: HWDN) might not set your pulse racing. Take a look at the performance of its shares since the dark days of the financial crisis however, and your opinion of this company might change dramatically.

Back in 2009, Howden’s stock was trading around 13p. Fast-forward eight years and any capital you had the courage to invest would have grown by a staggering 3,200%. 

Why is this relevant in 2017? Simply because 2016 saw investors lose confidence in Howden following June’s shock referendum result. With Brexit looming, many are questioning whether the good times can continue. Based on today’s full-year results, I don’t think there’s any cause for alarm. 

In 2016, group revenue rose to £1.3bn (2015: £1.22bn) with profits before tax increasing 8% to £237.0m. Despite softer trading conditions in the second half, Howden also grew its customer base by 30,000 (to 450,000 in total) while opening 23 new depots in the UK and continuing to trial its depots in Europe (specifically France and Germany).  

While volumes have weakened slightly over the past few months, management believe the company to be “well positioned to respond to a change in market conditions”. The fact that the outlook for 2017 “remains unchanged” is surely a sign of confidence. 

Trading on a price-to-earnings (P/E) ratio of 15 for this year, shares in Howden look good value to me, especially if our forthcoming departure from the EU isn’t quite the disaster some are predicting.

With a wonderfully robust balance sheet (net cash of almost £227m at year-end) and a long history of generating returns on the capital it invests of between 40% and 50% annually, Howden has all the hallmarks of a quality business.

The 2.7% yield on offer might look average, but with dividends covered almost 2.5 times by earnings in 2017, these payouts look very safe for now.

Still in good shape

Holders of stock in fund manager Aberdeen Asset Management (LSE: ADN) have endured a tough few years. Since peaking just above 500p in April 2015, the company’s shares have been on a downward trajectory ever since and now change hands for 270p. Despite this, I’m inclined to agree with CEO Martin Gilbert’s recent assertion that the £3.5bn cap “remains in good shape“.  

While assets under management have dipped in recent times following concerns over the health of emerging markets, there are signs that things are improving. Gross inflows during the last three months of 2016 came in at £10.2bn — a 21% increase on the £8.4bn during the previous quarter. The company also reported strong returns for the year, despite a fall in sentiment following Donald Trump’s election victory in November. As far as outflows were concerned, the company reported the bulk of these were “largely lower margin and anticipated“.

Trading on a P/E of 13 for 2017 (falling to 12.5 in 2018 based on earnings estimates), Aberdeen is cheaper than industry peers like Jupiter Fund Management and has a very strong balance sheet. Assuming it can attract clients back from lower-cost passive investments, implement promised cuts and maintain its generous yield (currently 6.4%), now could be a great time to buy a slice of the firm.

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Paul Summers has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management and Howden Joinery Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

If you do plan on catching a falling knife, you have to do your research beforehand. If you don’t properly understand the opportunity, there’s a high chance you’ll end up with hefty losses. 

Tough times 

Leading emerging markets fund manager Aberdeen Asset Management (LSE: ADN) has fallen on tough times recently. Deteriorating investor sentiment towards emerging markets and a backlash against high-fee, poor-performing actively-managed funds has seen investors rush to exit the group’s products. At the beginning of February, Aberdeen reported its 15th consecutive quarter of fund outflows. The company reported assets under management of £302.7bn at 31 December, down 3% from £312.1bn on 30 September last year.

As outflows have accelerated, shares in Aberdeen have lost nearly half their value since the beginning of 2015 and even after these declines, they don’t look to be that attractive on a valuation basis. Based on current City estimates, shares in Aberdeen trade at a forward P/E of 13.4 and earnings per share are set to fall 3% for the year ending 30 September 2017. 

Nonetheless, I believe Aberdeen could be a great long-term investment despite current headwinds. 

The group has been around for more than three decades and its asset managers have a wealth of experience. Management has promised £70m of cuts over the next few years to boost profit margins and this cost diet may also spur a reorganisation of the business to better cope with the changing face of asset management. This is where Aberdeen really needs to change to keep up with the shift to low-cost passive investing. It looks as if management is aware of this trend, but it will take time for the business to convince customers it has changed.

When the transformation is complete, funds should flow back to the group and earnings should start to grow again. 

The best in the world

Rolls-Royce (LSE: RR) is another falling knife I would catch. The reason why I like Rolls is the company’s leading position and expertise in the aerospace market. While the firm is grappling with short-term headwinds, most of its revenue comes from long-term engine maintenance contracts, and it’s here where the value is to be found. 

At the end of 2016 the firm reported an order book of £80bn and based on last year’s total revenue figure of £14bn this backlog locks in just over five-and-a-half years of sales. This gives Rolls a clear runway for future performance. 

However, it has its problems and after five profit warnings, it’s clear why some investors are not willing to trust the business anymore. But the company is slowly dealing with these issues. Costs are coming down across the group and the SFO bribery investigation has now been settled. Sales are still under pressure thanks to a lack of spending from oil and gas customers, but it is expected capital spending in this market will pick up again during 2017 for the first time in three years. 

With Rolls it pays to look past the firm’s near-term problems to future growth. 

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Rupert Hargreaves owns shares of Rolls-Royce. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Today I’m looking at three stocks which each offer a forecast yield of about 6%. Two of them are companies I believe are attractive contrarian buys, but one is a company I’d rather not own.

Get ahead of the crowd

Emerging markets have been out of favour with institutional investors over the last year or so. This has led to a fall in funds under management for emerging market asset managers such as Aberdeen Asset Management (LSE: ADN).

However, Aberdeen’s rival Ashmore Group pointed out last week that institutional investors are currently underweight in emerging markets. Ashmore’s figures suggest that investment returns from these markets are improving. If institutional money starts to flow back into this sector, profits at specialist fund managers could rise quickly.

Aberdeen’s 2017 earnings per share are expected to be about 25% lower than in 2013. With the shares trading on a forecast P/E of 13 and offering a 6.3% prospective yield, I think now could be a good time to buy for medium-term gains.

It makes sense to bet elsewhere

The future looks uncertain for spread betting firms such as CMC Markets (LSE: CMCX). The high profit margins enjoyed by these firms are partly dependent on them offering retail trading customers a lot of leverage. The FCA and other European regulators have announced plans to restrict this gearing to protect customers from losses.

CMC has already admitted that the proposed changes will “undoubtedly present the group with some short- to medium-term challenges”. In my opinion, these are likely to mean that the firm’s trailing P/E of 7 is not a reliable guide to its likely performance. The latest consensus forecasts suggest that earnings will fall by 20% in 2016/17 and by 13% in 2017/18. In reality, even these figures are just guesswork at this early stage.

It’s possible that spread betting firms will adapt and thrive. But if you want to bet on a recovery in this sector, I’d choose FTSE 250 member IG Group. IG is bigger, more diversified and more profitable. CMC’s 6.7% forecast yield seems much too risky to me.

Shopping for bargains

The retail sector is not popular with investors at the moment. But I believe that potential bargains are starting to emerge.

One possible choice is department store Debenhams (LSE: DEB). The group’s shares have fallen by 26% over the last year, and now trade on a trailing P/E of just seven.

The main reason for this is that the group’s adjusted earnings are expected to fall by 15% to 6.7p per share this year. However, even at this level, earnings should still cover the 3.4p dividend twice over. This suggests to me that Debenhams’ 6.1% forecast yield could be pretty safe for now.

I think there’s still a future for bricks-and-mortar retailers with a strong online presence. Ex-Amazon chief executive Sergio Bucher is expected to announce details of his strategy for the firm in the spring. Barring any surprises, I believe the shares could be a decent income buy at current levels.

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Roland Head has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Aberdeen Asset Management. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Mixed performance

The company in question is Aberdeen Asset Management (LSE: ADN). Its trading update for the quarter to 31 December was rather mixed. Assets under management declined from £312bn to £303bn due to net outflows of £10.5bn.

This figure included two large redemptions of active equity mandates from a UK wealth manager and a Sovereign Wealth Fund that the company reported in its 2016 results. There were also anticipated structural outflows from certain institutional clients, while a further £2.4bn is scheduled to be withdrawn from lower-margin portfolios during the current quarter.

However, the investment performance of the company was relatively impressive. Net outflows were partially offset by £3.3bn asset appreciation, while there has been a growing interest in the company’s wider range of capabilities. That’s despite investors generally putting asset allocation decisions on hold following the US election.

Dividend prospects

As mentioned, Aberdeen currently yields 6.8%. While exceptionally high, dividend growth could be somewhat lacking over the next couple of years. That’s partly because dividend cover is relatively modest at 1.2, while the company’s bottom line is forecast to fall by 1% this year before rising by 5% next year.

Despite this, it has significantly greater dividend appeal than sector peer Hargreaves Lansdown (LSE: HL). It currently yields a rather lowly 2.7% from a dividend which is covered just 1.1 times by profit. Although earnings growth of 10% is expected this year, followed by a rise of 14% next year, it seems unlikely that the majority of this growth will be passed on to shareholders in the form of a dividend. Therefore, Aberdeen’s income prospects appear to be much brighter.

Looking ahead

The same could be said when it comes to valuation. Aberdeen currently trades on a price-to-earnings (P/E) ratio of only 11.9, which indicates an upward re-rating is on the cards. However, Hargreaves Lansdown has a P/E ratio of 32.9. Certainly, the latter’s forecasts are superior to the former’s outlook, but even factoring this in makes it difficult to justify such a large difference in the two companies’ ratings.

Aberdeen offers one of the highest yields in the FTSE 350. Therefore, it’s likely to become increasingly popular among investors as inflation rises during the course of the year. Furthermore, it has a relatively low valuation which provides it with a margin of safety should market conditions turn against it. So it appears to have a good chance of delivering a total return which is ahead of the FTSE 100.

The post Will this 6.8% yielder smash the FTSE 100 in 2017? appeared first on The Twelfth Magpie.

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Unsurprisingly, the answer to that question hinges on what oil prices do. There’s no way for us to accurately predict where oil prices will go, but the market’s lack of enthusiasm for the OPEC supply cut agreement doesn’t leave me with much hope that they’ll be skyrocketing.

But if prices remain around their current $50-$55/bbl range, Shell’s dividend is looking significantly safer than it has been over the past two years. That’s because the combination of cost-cutting, highly profitable downstream refining and trading operations mean Shell’s operations are still generating significant cashflow. In Q3, operations provided $8.4bn in cash when the average realised price of each barrel of oil and gas equivalent was $40.43.

Now, Shell still had to issue $8bn of new debt to cover the $2.7bn cash dividend (a further $1.1bn was paid in shares), as well as costs related to the BG acquisition and significant interest payments. But, if oil can stay at or above $55/bbl then Shell should be quite close to being free cash flow-positive for the first time in years.

That said, if oil prices don’t reach this level then income investors are likely to be in for a rough ride as $78bn of net debt means a third successive year of uncovered dividends would be dangerous for Shell’s balance sheet. Quarter end gearing of 29.2% is rapidly approaching the upper end of management’s target, so if oil prices remain depressed and asset sales are minimal then dividends will be in considerable danger of being slashed.

More cash needed?

Shell’s dividend isn’t the only one beholden to forces outside of management’s control as investors in emerging markets-focused Aberdeen Asset Management (LSE: ADN) know all too well. Fourteen straight quarters of outflows from Aberdeen’s funds have led to earnings per share falling for each of the past three years. Meanwhile, a progressive dividend policy means the shares’ 7.68% yielding dividend are now covered only 1.07 times by earnings.

With net cash at the end of September totalling £548m and annual dividends only £280m, it would appear that management could stomach uncovered dividends in 2017. Unfortunately the situation is more complicated than it would seem. That’s because £335m of this cash is a regulator-mandated capital buffer that’s set to rise to £475m in the coming year. With cash generated from operations falling 31.9% year-on-year in 2016 to £362.9m, it’s unlikely that Aberdeen’s dividend could stand another year of even worse trading performance. With US interest rates rising and emerging markets once again tanking, I’m fairly bearish on Aberdeen’s dividend outlook in 2017.

The post Will Royal Dutch Shell plc and Aberdeen Asset Management plc’s 6%+ yields be slashed in 2017? appeared first on The Twelfth Magpie.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management and Royal Dutch Shell B. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Aberdeen Asset Management

The last few years have been tough on emerging markets, and even tougher on specialist emerging markets fund manager Aberdeen Asset Management (LSE: ADN). Its share price is down 45% over the last two years due to a surge in net outflows from disgruntled investors as fund performance slips. It was staging a bit of a rally earlier this year, but now the fight seems to have gone out of it. The reason? Step forward President-elect Donald Trump, raising fears of a trade war with China, Mexico and other emerging economies. The stronger dollar could pile on the pressure, as many have borrowed heavily in the greenback, and this will ramp up their debt servicing costs.

The result? November’s full-year results show Aberdeen suffered £32.8bn of net outflows, with underlying profit before tax down 28% to £352.7m. On the plus side it retains a strong cash position of £548.8m and its juicy 7.52% yield may tempt income seekers. The danger is that a Santa rally sweeps through the US but bypasses emerging markets – and Aberdeen.

Hargreaves Lansdown

Mass-market independent financial adviser Hargreaves Lansdown (LSE: HL) has been a darling of investors in recent years, a true growth success story. Over the last five years, annual revenues have leapt from £238m to £338m, although the rate of growth has slowed lately. In fact, they dipped from £395m to £388m in the year to 30 June 2016, hit by stock market turbulence.

Some of the shine has come off the stock with first quarter net new business inflows of £1.11bn, down 22% year-on-year. However, net quarterly revenue hit a record £90.6m after rising 15%. It now has £67.6bn under administration, up from £61.7bn in June 2016. If you believe in the Santa rally, then Hargreaves Lansdown could be a good way to play it. The downside is that it trades at 32.7 times earnings and needs to keep the growth story going to justify that kind of valuation.

Schroders

Stock market turbulence? What turbulence? Asset manager Schroders (LSE: SDR) has sailed through recent stock-market volatility, its share price more than doubling over the last five years. There have been bumps along the way but it’s hitching the reindeer for a Santa rally after rising 5% in the last week, more than double the rise on the FTSE 100.

Schroders’ latest statement covering the nine months to 30 September showed profits before tax dipping slightly to £436.2m, although assets under management jumped from £294.8bn to £375bn. Net inflows also remain healthy but there’s a price to pay for success, in this case 16.52 times earnings. Still, with growing exposure to the US economy following its acquisition of a securitised credit business in North America, it could still be in for a Merry Christmas.

The post How a Santa rally could lift these 3 financial stocks. appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended Aberdeen Asset Management and Hargreaves Lansdown. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.