New Holding: Standard Life Aberdeen

Standard Life Aberdeen (SLA.L, FTSE 100, Market Cap £6.2bn, 243p, 1.5% of JIC Portfolio and 0.0% of JIC Top 10)

New holding; main attraction is the prospective 9.4% dividend yield.

I have been watching the valuations on many FTSE 100 stocks fall to levels which I think, on any sensible time period, look too tempting. One that has attracted my attention is Standard Life Aberdeen and so I was interested to read the Tempus column in The Times over my coffee this morning. It focuses on Standard Life Aberdeen and concludes that it is a buy. I think the conclusion makes sense.

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I think he makes a good case as to why the dividend is safe. The dividend costs £530m which should be sustainable until the underlying business starts to grow again. Even if he is wrong and the company eventually cuts, the shares would most probably react favourably to that. He is also correct to point out that timing the bottom on these things is near on impossible, but I can’t help feeling that in a year’s time I’ll look back and be pleased I took the plunge.

The company is also engaged in a share buy back and only yesterday bought 871,317 shares at between 234.05p and 243.85p.

He fails to point out that the Keith Skeoch and Martin Gilbert, co CEO’s, each spent just over £400,000 on stock on 31stOctober, at 269p and 272p respectively. Today I bought at 242.5p.

I bought a 1.6% position, as that is pretty much all the cash left in the JIC Portfolio.

Carrying on the “dividend and income” theme of my November monthly review, investing £6,037 should give the JIC Portfolio a further £569 income next year and hopefully some capital appreciation on top.

SEE JIC Portfolio tab above for transaction deatils and updated Portfolio

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