The sell-off within the Prudential (LSE: PRU) share price over the previous few years has stunned even me. The ‘univestable’ tag positioned on China (considered one of its greatest market) didn’t assist. But when there’s one factor that I’ve learnt through the years, is that high quality companies with robust moats make compelling investing propositions.

Rising momentum

When an organization embarks on a brand new technique, as Prudential did 18 months in the past, there are all the time execution dangers. Nevertheless, over the previous few quarters, it’s changing into more and more obvious to me that the enterprise is on target.

For the three months ended 31 March 2025, the enterprise continued the place it had left off with its 2024 full-year outcomes. New enterprise revenue was up 12% to $608m. Annual premium equal, (which permits insurance coverage firms to check upfront single premiums with common ones) rose 4% to over $1.6bn.

China and Hong Kong stay its key markets. Specifically, it has proved very adept at capturing new enterprise from Mainland Chinese language guests to Hong Kong. It continues to innovate on this entrance. For instance it lately launched a brand new multi-currency financial savings product.

Structural development drivers

The primary motive why I proceed to stay bullish on the inventory, relate to important structural development alternatives. By 2033, the entire addressable marketplace for Asian gross written premiums is predicted to succeed in $1.6trn. That fully dwarfs every other comparable market.

One key driver of this development is shifting demographics. By 2040, 28% of China’s inhabitants can be aged over 60. Nevertheless, life insurance coverage penetration charges are in low-single-digits throughout all its key markets, creating a rare alternative, for my part.

In its annual International Wealth Report, UBS analysts estimate that there’s over $150trn of family wealth throughout Asia. A rising center class is resulting in a larger consciousness of and wish for wealth administration options. With a formidable company community, the agency is properly positioned to revenue from this burgeoning market.

Dangers

The rising rift between the US and China, and related tariffs is without doubt one of the key dangers going through the enterprise right now. The impact of protectionist insurance policies on its core markets aren’t in any respect clear.

Its diversified funding portfolio has cushioned it considerably from the Chinese language property bubble implosion. Nevertheless, in a possible future market setting the place each asset class goes down in tandem, its portfolio of investments would fall dramatically, thereby weakening the steadiness sheet. The imposition of tariffs on President Trump’s ‘Liberation Day’ highlights that this stays a definite risk.

Dividends

Though Prudential doesn’t supply the sort of market-beating returns of Aviva and Authorized & Basic, the depressed share price has pushed up the dividend yield to 2%. The dividend per share (DPS) grew 13% final yr and the corporate is anticipating it to develop 10% this yr. That’s fairly spectacular for a inventory that I view extra as a development share than an revenue one.

With constructive momentum, assembly its 2027 goal of rising new enterprise revenue at a compound annual price of 20% is very achievable. If it does so, then I feel the price can rise and DPS ought to develop considerably so I’ll have locked in a strong, if not spectacular, yield. That’s the reason I’ve been including extra shares to my portfolio in the previous few weeks.