FTSE 250 inventory aberdeen group (LSE: ABDN) has endured a torrid time since its ill-fated 2017 merger between fund managers Commonplace Life and Aberdeen.

After touching 485p within the giddy aftermath of the tie-up, the shares headed relentlessly south. Right this moment, they commerce at simply 175p. Whereas dividends have softened the blow, they haven’t come near offsetting the capital destruction.

Poor fund efficiency, investor outflows and the extensively mocked vowel-free rebrand to aberdeen in 2021 all took their toll.

The aberdeen share price is bouncing again

It hasn’t suffered alone. FTSE 100 financials like Authorized & Common Group, M&G and Phoenix Group Holdings have additionally endured years of share price volatility as rising rates of interest lured buyers in the direction of safer returns from money and bonds.

Many had written aberdeen off, however instantly there are indicators of life. First, it’s lastly ditched the ridiculous title. Nicely, virtually. It now insists on being known as ‘aberdeen group’, with a lowercase ‘a’, which is a bit of irksome.

That was introduced alongside full-year outcomes on 4 March, which lastly gave buyers one thing optimistic to chew on. Regardless of ongoing market volatility, the aberdeen share price is up 12% prior to now month and 15% during the last yr.

aberdeen swung again into the black in 2024, posting a pre-tax revenue of £251m. That’s a nifty turnaround from a £6m loss the yr earlier than. Adjusted working revenue edged up 2% to £255m, pushed by cost-cutting, higher markets and robust progress at acquisition Interactive Investor, a uncommon brilliant spot in troubled occasions. Property below administration rose 3% to £511bn, whereas internet outflows narrowed dramatically, from £17.6bn to £1.1bn.

CEO Jason Windsor was eager to focus on the corporate’s return to progress, however does that make it a purchase?

An affordable inventory with a excessive yield

Leaping on a inventory proper after a powerful set of outcomes is all the time a danger. Pleasure can fade, and profit-takers might drag the price down. That stated, aberdeen appears good worth buying and selling at a price-to-earnings ratio of simply over 11. And it affords an attention-grabbing dividend yield of 8%+.

Chastened by current troubles, administration will proceed to give attention to value self-discipline and strengthening core companies, whereas the title change indicators a need to maneuver on from previous missteps.

Challenges stay. Outflows in its asset administration division persist, whereas energetic fund managers typically are nonetheless shedding floor to passive investing. With inflation stubbornly excessive, rates of interest may keep elevated, that means buyers can safe first rate returns from money and bonds with out risking capital on dividend shares like this one.

Analysts are extra optimistic

Structural pressures on energetic fund administration aren’t going away, and brokers stay cautious. Of 15 analysts providing one-year share price forecasts, the median goal is simply over 166p, about 5% beneath at the moment’s price.

Nonetheless, most of these forecasts will predate the newest outcomes. On 6 March, Jefferies upgraded its goal to 215p and issued a Purchase ranking.

As somebody who owns Authorized & Common, M&G and Phoenix, I’m already closely uncovered to this sector. However for individuals who aren’t, aberdeen might be price contemplating. Particularly for buyers keen to choose their second and maintain for the long run.