5 Insurance Stocks Set To Soar: Aviva plc, RSA Insurance Group plc, Standard Life Plc, Old Mutual plc And Direct Line Insurance Group PLC

These 5 insurers could be worth buying at the present time: Aviva plc (LON: AV), RSA Insurance Group plc (LON: RSA), Standard Life Plc (LON: SL), Old Mutual plc (LON: OML) and Direct Line Insurance Group PLC (LON: DLG)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

With the FTSE 100 trading on a price to earnings (P/E) ratio of 15.8, many investors may be feeling that there is a lack of value in the UK’s main index. After all, the FTSE 100 is within touching distance of the ‘Holy Grail’ of 7,000 points and, as a result, it may appear to many investors that this is not a good time to buy.

While some stocks may well be overvalued, the insurance sector still offers a highly desirable mix of value, income and growth. As such, now could be a good time to buy shares in insurance stocks – especially for the long term.

For example, Aviva (LSE: AV) trades at a discount to the wider index despite being a very high quality company that is in the midst of an impressive turnaround story. It has a P/E ratio of just 11.2 and yet is forecast to increase its bottom line by 4% in the current year, and by a further 11% next year. In addition, its acquisition of Friends Life could create significant synergies for the combined entity and lead to upgraded profit for the new business over the medium term.

Should you invest £1,000 in Abrdn right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Abrdn made the list?

See the 6 stocks

Similarly, Old Mutual (LSE: OML) and Direct Line (LSE: DLG) also offer better value than the FTSE 100. They both have P/E ratios of 13.1 and yet are expected to increase their earnings by 17% and 11% respectively in the current year. In addition, Old Mutual currently yields an impressive 4.6% and Direct Line yields a mighty 6.6% — both are much higher than the FTSE 100’s yield of around 3.2%.

Of course, higher rates of growth are also available in the insurance sector. For example, Standard Life (LSE: SL) is expected to increase its bottom line by 18% this year, and by a further 17% next year, while RSA’s (LSE: RSA) growth rate of 59% this year and 10% next year is even more enticing. And, with these two companies having price to earnings growth (PEG) ratios of just 0.2 and 0.8 respectively, they also appear to offer growth at a reasonable price, too.

So, while the FTSE 100 may at first seem rather overvalued, there is still great value on offer – particularly in the insurance sector. Certainly, they may not be the most exciting of companies to own a slice of, but they could turn out to be among the most profitable in the medium to long term.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Aviva, Old Mutual, RSA Insurance Group, Friends Life and Standard Life. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

National Grid engineers at a substation
Investing Articles

£10,000 invested in this UK monopoly could generate a second income of £1,232 a year

Our writer explains how a £10,000 investment could help generate a healthy second income every year. But there are some…

Read more »

Businesswoman calculating finances in an office
Investing Articles

As 3i shares hold steady after the firm’s Q1 update, what should investors do?

After 3i reports steady progress in Q1, is it still one of the best FTSE 100 shares for investors seeking…

Read more »

DIVIDEND YIELD text written on a notebook with chart
Investing Articles

These 2 dividend shares are yielding at least 8.4%!

Our writer looks at two FTSE dividend shares that are offering double-digit yields. However, there are reasons to be cautious.

Read more »

Passive income text with pin graph chart on business table
Investing Articles

With a yield of 11.5% — and a 39% discount — is this stock the best for passive income?

Always on the lookout for passive income opportunities, our writer looks at the highest-yielding stock on the FTSE 350 that…

Read more »

Rolls-Royce Hydrogen Test Rig at Loughborough University
Investing Articles

Is the Rolls-Royce share price getting silly now?

After falling as low as 35p in the 2020 Covid crash, the Rolls-Royce share price is now hovering around £10.…

Read more »

Yellow number one sitting on blue background
Investing Articles

The FTSE 100 has a new number 1. But is it worth buying?

There’s been a change at the top of the league table of the FTSE’s biggest market-caps. Our writer looks at…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How an investor could aim for £1,000 a month in passive income with just 3 FTSE 100 shares

Sometimes it pays to keep things simple. Here, Mark Hartley outlines a strategy for beginners to get started towards £1k…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

These 3 FTSE 100 shares have crashed over 1 year!

These three FTSE 100 flops have had a torrid 12 months, with their share prices collapsing as much as 43%.…

Read more »