Aviva‘s (LSE:AV.) share price has soared in 2023. Up 12%, the financial services giant has risen on improved hopes for the UK’s financial and political panorama. Predictions of rate of interest cuts from the summer time that might stimulate client spending has additionally boosted the price.

But at 487.4p per share, I consider the FTSE 100 agency nonetheless seems to be grime low cost. Listed below are a number of explanation why.

Earnings metrics

The very first thing to do is take into account Aviva’s share price relative to predicted income. Based mostly on this, the corporate scores fairly nicely, in my opinion.

Metropolis analysts assume the underside line will develop 20% yr on yr in 2024. This leaves Aviva buying and selling on a beautiful price-to-earnings (P/E) ratio of 10.7 instances.

Nevertheless, the Footsie agency’s price-to-earnings progress (PEG) ratio is much more spectacular. At 0.5, it’s under the watermark of 1 that signifies a inventory is undervalued.

The PEG ratio stays low at 0.8 for 2025 too, because of predictions of one other double-digit rise in annual earnings.

Dividend yields

The subsequent step is to check out the dividend yield on Aviva shares. To offer some context, it’s a good suggestion to match how the corporate compares on this entrance in opposition to the broader FTSE 100.

The agency’s dividends have recovered strongly for the reason that pandemic, and Metropolis analysts anticipate this development to proceed. Consequently, the ahead dividend yield stands at an infinite 7.1%, virtually double the three.6% Footsie common.

In additional excellent news, brokers assume dividends will preserve rising sharply over the following two years as nicely. And so the yield marches to 7.8% and eight.4% for 2025 and 2026 respectively.

E-book worth

At face worth, Aviva’s share price doesn’t look so low cost relative to the worth of its property. Proper now, the corporate trades on a price-to-book (P/B) worth of 1.4 instances.

A studying above 1 signifies the market values a share extra extremely than the ebook worth of its property.

Because the graph above exhibits, this studying is a long way under these of Authorized & Common Group and Phoenix Group Holdings, however above these of Prudential and M&G.

Nevertheless, with the trade common coming in at 1.9 instances, Aviva’s P/B worth truly seems to be respectable immediately.

A prime worth inventory

In recent times Aviva has undertaken a collection of huge disposals, the latest of which noticed it promote its Singapore Life division in March. This raises threat because it’s rather more depending on sturdy financial circumstances in a slender number of nations (particularly the UK, Eire and Canada). As we all know, the UK financial system hasn’t been firing on all cylinders and UK customers haven’t felt massively assured of late.

But the corporate’s capability to develop earnings and dividends sooner or later stays good. Model energy makes it a market chief in lots of safety, retirement and insurance coverage product classes. And because the saving wants of a rising aged inhabitants improve, it might be within the field seat to proceed rising gross sales quickly.

All issues thought-about, I believe it’s one of many FTSE 100’s most tasty worth shares proper now.