Chesnara PLC's (LSE:CSN) steady cash flow continues to underpin its generous dividend, according to a preview note from Panmure Liberum ahead of the life insurer’s full-year results later this week.
Analysts expect commercial cash generation of around £51 million for 2024, more than enough to cover the group’s dividend, interest payments and central costs. The firm is forecast to pay a 24.7p dividend this year, implying a yield above 9% based on the current share price.
The group’s recent acquisition of Canada Life’s unit-linked book has added £8 million to its economic value and will contribute to future cash generation.
With over £200 million in financial firepower, Chesnara is well positioned for further deals, especially as some larger peers and private equity players retreat from the market.
Panmure has trimmed its target price to 380p to reflect a forward-looking valuation but retains a ‘buy’ rating, citing the dependable dividend and scope for growth through acquisitions.
In afternoon trading, the shares were up 1.7% at 277.21p.
Full-year results are on Thursday. For all the breaking news on mid- and small-cap companies bookmark www.proactiveinvestors.co.uk.