FTSE 250 shares are presupposed to be about progress, whereas the FTSE 100 is the place we search for dividends, proper?

However proper now, the smaller-cap index is house to some large double-digit dividends. With annual FTSE 100 returns averaging 6.9% previously 20 years, we certainly have to sit down up and pay attention to something over 10%.

At the moment I’m taking a look at abrdn (LSE: ABDN) after its share price has plunged 23% in 2024. The autumn has pushed the ahead dividend yield up as excessive as 10.5%.

What it does

Abrdn is an asset supervisor, catering for institutional and retail markets. On the finish of its third quarter at 30 September, it had belongings beneath administration and administration (AUMA) of £506.7bn. That was up 2% 12 months thus far.

The corporate fashioned from the 2017 merger of Commonplace Life and Aberdeen Asset Administration. The ensuing Commonplace Life Aberdeen was renamed in the course of the nice 2021 vowel scarcity. Properly, in 2021 anyway.

However little or no has gone proper since then. And regardless of an inital share price rise, we’ve seen a close to fixed fall to right now.

Why it’s down

Shedding some key prospects partially kicked off the share price slide.

Lloyds Banking Group was the very best profile deserter. It withdrew £109bn of belongings from abrdn, on the grounds that the mixed firm was now a competitor for Lloyds’ personal insurance coverage merchandise.

Wind ahead to 2022 and abrdn recorded a loss per share, after which solely simply scraped above zero in 2023.

In the meantime, the corporate has saved its dividend at 14.6p per share yearly since 2020, after slashing it from 2019’s 21.6p that 12 months. That’s with earnings coming nowhere close to masking it.

What subsequent?

After this story of woe, I can’t presumably be contemplating shopping for any shares, can I? Properly, I don’t suppose the outlook is as dangerous because it may be painted.

At the moment, the dealer consensus is towards abrdn, although it seems to be just like the Metropolis may be warming to it somewhat. The analysts’ common price goal is, a minimum of, above the place it’s now. As I write, the abrdn share price stands at 138p. And the 158p goal would imply a 14% rise.

Additionally, excessive dividend yields aren’t so uncommon for the time being. I reckon the entire asset administration sector might transform undervalued.

Over within the FTSE 100, M&G is on a forecast yield of 10.3%, which isn’t far behind. Forecasts recommend earnings for this 12 months additionally received’t cowl the dividend. However we must always see cowl by 2025 on this case.

Will I purchase?

I’m truly torn right here, as I do suppose we might see a greater 12 months subsequent 12 months. And uncovered dividends aren’t all the time such an enormous deal in this sort of enterprise, which may typically see risky money flows.

If the corporate comes up with that 10% dividend this 12 months, and makes constructive noises about its money outlook, I might see the inventory beating dealer targets.

I’ll move on it, nonetheless, as I see different massive dividends on the market with much less threat.