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Highlights
- M&G had increased its stake in South African local asset management firm Prudential Investment Managers to a majority of 50.22 per cent.
- Prudential Investment has now announced plans to rebrand itself to its majority shareholder M&G by end of 2021.
FTSE 100 stocks are usually considered a more stable investment option compared to mid-cap or smaller cap stocks, due to these companies being at a mature phase of growth.
Moreover, income investors seeking high dividend payouts also look for such blue-chip stocks for their portfolio. One such FTSE 100 stock which is in focus is insurance and investment management company, M&G PLC (LON: MNG). M&G had demerged from another FTSE 100 insurance and investment management group Prudential PLC (LON: PRU) back in 2019.
M&G PLC’s (LON: MNG) share price performance
M&G shares were trading at GBX 204.60, up by 0.54 per cent as of 15 September 2021 at 12:39 PM BST.
(Image Source: Refinitiv)
The company’s market cap is at £5,290.81 million as of 15 September, while it has netted shareholders a return of 35.58 per cent in the past one year.
The company’s forward price to earnings ratio (P/E) is at 8.85x, compared to an industry median of 15.30x, according to data from Refinitiv. Its NTM dividend yield is at the higher end of its industry peers at 9.22 per cent, compared to an industry median of 3.50 per cent.
SA’s Prudential to rebrand to M&G
South Africa based investment management firm Prudential Investment Managers stated that it will rebrand itself to its main shareholder, M&G PLC.
The decision comes after M&G increased its stake in the company to a majority shareholding of 50.22 per cent from its earlier holding of 49.99 per cent, as M&G plans to increase its presence in the region.
The news comes a few weeks after M&G signed an agreement to acquire UK based independent financial advisor firm Sandringham Financial Partners in August for an undisclosed amount. The deal is expected to increase MNG’s wealth business’ asset under management (AUM) by £2.5 billion, subject to meeting its regulatory approvals.
M&G is set to make its interim H1 2021 dividend payout later this month on 29 September. It had reported its dividend policy of this year to be 33.33 per cent of FY 2020 total dividend.
After the payment of this dividend, M&G’s consolidated dividend will be 40.1 pence per share since the listing of the company’s shares in October 2019.
Bottom Line
M&G’s forward dividend yield is estimated to outperform its industry median by almost 3x. At the same time, the forward P/E is almost half of the industry median. The stock looks undervalued on these parameters and makes it an attractive choice for income investors, who are looking for reliable investment option on FTSE 100. However, an investor must check other parameters, especially the economic condition and the prevailing industry situation prior to investing.
