At the time of writing, the shares of this troubled FTSE 100 group are trading at 353 pence -- 5% down from a year ago compared with a 7% rise in the Footsie.
How will Aviva's business have performed in 2012? And will the results justify the weak performance of the shares?
Consensus earnings forecasts
Consensus earnings forecasts for many of the companies that were most badly ravaged by the financial crisis continue to be fairly meaningless. Individual analyst estimates aren't clustered around the consensus but are spread far and wide either side.
As such, different providers of aggregated forecasts come up with widely different consensus numbers due to the different pools of analysts they use and the different methodologies they employ to arrive at the consensus.
Aviva is a case in point. At one extreme, Morningstar provides an earnings-per-share (EPS) consensus number of 0.1 pence; and, at the other, Yahoo! Finance offers a consensus of 45.6 pence. Take your pick between those two or any of several other numbers in between!
I'd suggest you don't pay too much heed to EPS when you look at Aviva's upcoming results, and concentrate instead on the net asset value (NAV) per share number.
The table below shows Aviva's statutory (IFRS) NAV per share at the end of each quarter since last year.
|31 Dec. 2011||31 March 2012||30 June 2012||30 Sept. 2012||31 Dec. 2012|
In terms of valuation, at a share price of 353 pence, Aviva is trading at an 11% discount to NAV at the Q3 balance sheet date of 30 September. The NAV is, of course, five months out of date now, so the updated number in the upcoming results will give us an improved handle on the level of the discount at which the shares are trading.
The one thing in a company's accounts that can't be manipulated, massaged or masked is the dividend. And in the case of Aviva, it's the dividend that has drawn many investors into the share over the past few years.
Aviva's yield has been persistently more than double the average yield of the FTSE 100. At the current share price of 353 pence, the 26 pence dividend paid to shareholders over the past 12 months represents a mammoth income of 7.4%.
When a company's yield is that high, the market is effectively pricing in a dividend cut. Has the crunch time come? One or two analysts have recently started to factor in a cut, but the dividend consensus for 2012 still remains close to the 26 pence level.
As Aviva has already paid an interim dividend of 10 pence, all eyes will be on whether it delivers a final of 16 pence.
All eyes? Well, perhaps one or two strange folk will make a beeline to discover how Aviva's "most talented high-potential executives" are getting on in producing plans for the company's "27 'amber' business cells" to which they were assigned last quarter.
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