AMP Ltd (ASX: AMP) shares climbed higher at the end of June, recouping losses shed earlier on in the month.
The same can't be said for the year-to-date, though.
After a strong start to the year, AMP shares crashed by around 26% in February following the financial services company's FY25 results. It came in far below expectations, and investors were disgruntled.
The decline marked the company's largest one-day fall since 2003, when its value tanked 36%.
Ongoing geopolitical tensions and concerns about Australia's inflation data rate also weighed heavily on financial shares like AMP throughout the first half of the year.
Thankfully, AMP's first-quarter update was a little more positive. The company reported 45% growth in Platforms' net cash flows and improved Superannuation & Investments (S&I) net cash outflows in April. The result proved that business growth is underway and revealed momentum across several key divisions.
It looks like AMP is still viewed as a potential turnaround story by the experts, too.
Many think that if management successfully executes its strategy, improves profitability, and restores market confidence, the share price could benefit from both earnings growth and a higher valuation multiple.
Market Index data shows the majority of brokers have a strong buy rating on AMP shares. The $1.72 average target price implies a potential 7% upside at the time of writing.
The outlook for AMP shares looks positive. But it's not the only reason investors should think about adding the stock to their portfolio.
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AMP shares are a great passive-income opportunity
While AMP is inherently financial cyclical stock, it does have some defensive qualities.
The company is well-known for its superannuation funds, home loans, and everyday/savings accounts. But, a significant portion of its revenue comes from the AMP's wealth management and superannuation accounts.
Superannuation is often considered defensive because it is an essential financial service, the customer relationships are generally sticky because this type of customer doesn't usually switch providers, and AMP also benefits from recurring fees.
What dividend does AMP pay its shareholders?
AMP typically pays its investors twice-yearly dividends: an interim dividend in September and a final dividend in April.
AMP's latest dividend payment in April was 2 cents per security, with 20% franking. Shareholders were also paid an interim 2 cents per security, 20% franked, in September last year.
At the time of writing, that translates to a trailing dividend yield of around 2.5%.
