Allianz: High dividend yield at attractive valuation.

Last Updated: 23. Februar 2024By

Presumably, you have also secured various areas of your life against unforeseen events. Perhaps even with a product from Allianz, whose stock we take a look at today as the 2023 results have been published. The insurance company once again achieved a record operating profit in the past year, rising by almost 7 percent to 14.7 billion euros.

Leading insurance and financial services provider Allianz is one of the world’s leading insurance and financial services providers and is also one of the largest asset managers. The company has a long history and a strong presence in many countries around the world. Allianz generates high annual revenues from premiums and offers a wide range of insurance products and financial services for individuals, businesses, and institutional clients. These include life insurance, health insurance, property insurance, liability insurance, accident insurance, and travel insurance. In addition, asset management, investment funds, pension plans, and banking products are also offered.

Premium increases and high interest rates The insurance sector benefits from pricing power and high interest rates. When Allianz increases premiums for its insurance products, this usually means that it generates more revenue from policies. These additional revenues help strengthen the company’s financial stability and achieve higher profits. The insurer also manages large sums of money in the form of premium payments and capital investments. The current interest rate environment allows Allianz to generate higher returns on its investments, which should have a positive impact on profits.

Turnaround at PIMCO PIMCO is also doing better again after the year 2022 was burdened by billions in costs for the „Structured Alpha“ scandal involving the sale of hedge funds in the USA. The turnaround at the asset manager has paid off. Net income increased by a third to 8.5 billion euros last year and should continue to contribute positively to the insurer’s overall result.

Allianz share in the weekly chart – ISIN: DE0008404005


Evaluation and technical chart analysis The insurer increased its dividend by 2.40 to 13.80 euros per share because Allianz intends to distribute a larger portion of its profits to shareholders in the future. The P/E ratio for Allianz stock in 2024 is 9.9. The expected dividend yield for 2024 is attractive at 5.4 percent, especially when considering the positive price development. A look at the chart shows a long-term uptrend from bottom left to top right. Since the prices have already moved far away from the 40-week line (blue), pullbacks are becoming more likely.

Conclusion For those who prefer regular dividend payments in their portfolio, Allianz shares are a good investment. Although the market expects interest rate cuts in Europe and the USA during the course of this year, the capital business is likely to continue generating robust returns, as the interest rate cuts are expected to be small.