MENU

AMP’s dividend yield expands

Diversified financial services company AMP  (ASX: AMP) has seen a sharp fall in its share price in the last month from a two year high of $5.79 to $4.90. At current prices, AMP is trading on a historic price-to-earnings multiple of 19.9 times — this is not cheap unless you believe the stock market can rally a lot further in the near term; however given the company’s diversified earnings streams and extensive network the business enjoys, it is arguably not overpriced either.

The dividend yield has improved as a result of the recent share price fall to 5.1%, which makes AMP’s dividend look relatively attractive compared with its peer group. Financial service peers such as Perpetual (ASX: PPT), IOOF Holdings (ASX: IFL) and Platinum Asset Management (ASX: PTM) are trading on dividend yields of 2.3%, 5% and 3.9% respectively.

Foolish takeaway

Even after the recent drop in S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) the overall funds under management and advice (FUMA) of financial service providers will not have dramatically altered when considered based on their average FUMA. Investors who look through this short-term volatility may find they have the opportunity to purchase leading financial service providers at enticing valuations and paying reasonable dividend yields.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Tim McArthur owns shares in Perpetual.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.