It hasn’t been one of the best yr for Authorized & Common (LSE: LGEN). Its share price has taken an 8% hit in 2024. On the flip facet, the FTSE 100 is up 7.5%.

However with the inventory falling this yr, I’ve been watching it intently. The truth is, I reckon now could possibly be a sensible time for me to think about shopping for some shares. That’s what I’m doing proper now for my portfolio.

Rising yield

One purpose for that’s due to the monetary service stalwart’s dividend. A falling share price means the next yield. As such, the inventory presently has a thumping 9% payout.

That’s the third-highest on the FTSE 100. And it clears the index common 3.6% yield with ease. What makes it even higher is that its dividend has been rising lately largely because of administration’s actions.

Within the final decade, its payout has climbed by over 80%. On condition that dividends are by no means assured, it’s actions like these that fill me with confidence when focusing on shares for passive revenue.

We’ve additionally seen administration put emphasis on rewarding shareholders in more moderen occasions. For instance, the agency is ready to finish its five-year cumulative dividend plan this yr. Throughout that point, it could have returned practically £6bn to shareholders by way of the scheme. This yr, the board has signalled its intention to develop the dividend by 5%.

A vibrant future?

What I additionally like about Authorized & Common is that I feel the agency is well-positioned to capitalise on developments such because the ageing UK inhabitants. Within the subsequent 25 years, predictions have the variety of folks older than 85 within the UK doubling to 2.6m.

With folks residing longer, there’ll naturally be an increase in demand for retirement, wealth, and safety merchandise. Authorized & Common will profit massively from this. It’s already a frontrunner in areas such because the pension danger switch market.

Points alongside the way in which

That mentioned, whereas I see long-term worth in Authorized & Common, it received’t be a easy journey for the enterprise. Inflation and excessive rates of interest nonetheless pose a problem. Whereas it might really feel like we’re out of the woods, financial uncertainty is ongoing and presents a menace to the agency’s operations.

For instance, a delay in future cuts would hurt investor confidence, which might see prospects pull their cash out of funds. Over the previous couple of years, the enterprise has seen its belongings below administration (AUM) take successful. Most not too long ago, we noticed this within the first half of the yr, when complete AUM for its asset administration division fell by 3%.

Lengthy-term outlook

However as a long-term purchase, I’m bullish on the FTSE 100 stalwart. Its shares look decently priced, buying and selling on a ahead price-to-earnings ratio of simply 9.1. Couple that with its meaty yield and future progress prospects, and I feel Authorized & Common could possibly be a shrewd purchase. If I had the money, I’d snap up some low cost shares as we speak.