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Aviva stokes the fire

The life insurance and asset management group is hoping to generate some enthusiasm from investors
December 5, 2017

Well, you can't blame a chief executive for trying. When you put out a stock exchange announcement entitled 'Aviva upgrades growth, cash and dividend targets', your hope is to elicit some sustained enthusiasm for the stock. 

IC TIP: Buy at 504.5p

For Aviva (AV.) boss Mark Wilson, the positive feeling proved fleeting. The shares spiked above 520p on the day, before falling back closer to 500p.

Encouragement is probably a better word: Aviva decided to deploy £3bn in excess cash over 2018 and 2019 to repay debt, fund acquisitions and provide additional shareholder returns. Bullish analysts at Barclays had expected £2.4bn. Earnings growth targets were upped from mid single digits to "higher than mid single digits". The payout ratio target for 2020 was increased to 55-60 per cent, from 50 per cent in 2017.