FTSE 100 life insurer Aviva has struck the right balance between handing out cash and reinvesting for growth, according to broker RBC, which has upgraded its price target to 510p.
The Canadian broker reckons Aviva’s balance sheet is strong enough to support annual share buybacks of £450mln and grow the dividend by 4% going forward.
That results in a capital return yield of 33% over the period 2022-24, estimates the broker, even with the fact that the current dividend yield is 14% higher than its historical average.
Outperform with a 510p target, up from 420p, is RBC's view.
Shares rose 3% to 438p.