The abrdn (LSE: ABDN) share value has had a foul few years. However the identical is true of most shares within the finance and funding enterprise.

Within the phrases of CEO Stephen Fowl: “The funding trade confronted additional structural and macroeconomic challenges throughout 2023 with a ‘greater for longer’ [interest] fee atmosphere throughout developed economies including sustained strain on most asset courses.“

Numerous points have pushed abrdn shares down 33% in 5 years. And that’s after a tick up of a few factors on outcomes day (27 February).

Earnings up

The outcomes for FY23 seemed a little bit of a blended bag.

Web working earnings dropped 4%. The corporate recorded a £6m loss earlier than tax in IFRS phrases, however that was rather a lot higher than the £612m IFRS loss in 2022. And the agency says it “displays adjusting objects of £336m“.

Brief-term revenue and loss might be deceptive for an funding agency, as there’s fixed adjustment in asset values occurring. It’s not like Tesco, which buys stuff and sells it.

Property below administration — or AuM — is a key measure. And the 1% fall to £495bn appears fairly good to me within the 12 months we’ve simply been by way of. It did characterize a 35% greater web outflow of £13.9bn, thoughts.

Regardless of the strain, we noticed a 32% rise in adjusted diluted earnings per share. The dividend is unchanged at 14.6p, for a 9% yield.

Dividend money cow

Money returns are key to me. I’m cautious once I see such an enormous dividend yield, particularly in powerful occasions like these. However seeing abrdn developing with the money offers me a little bit of confidence.

Dealer forecasts present the identical dividend maintained by way of to 2025. And if I owned the shares, I’d be very happy to take the money whereas I watch for the investing trade to select up.

Nonetheless, the dividend needed to be the most important threat within the subsequent few years. If the corporate can’t preserve it, I may see one other stoop within the share value.

Right here’s a thought. A single £20k Shares and Shares ISA allowance put right into a inventory that returns a gentle 9% per 12 months may develop to 1,000,000 in 19 years.

Outlook

The board’s outlook just about informed us to anticipate extra of the identical in 2024, and that’s adequate for me for now.

Money margin broadly in step with 2023, powerful marketplace for asset managers, modest price progress with inflation falling slowly… no huge shock.

The agency expects to realize money financial savings of at the very least £150m yearly, with whole restructuring prices of lower than £150m in 2024.

This steering does assume “a steady rate of interest atmosphere“, and that appears conservative. If the Financial institution of England does minimize charges in 2024, perhaps we’ll see a greater outcome.

My verdict

My total take from that is “regular as we go.” And for me proper now, we go high-quality. I fee abrdn as one to think about for long-term earnings buyers. It’s on my ISA candidates record for 2024.