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3 Things to Loathe About Aviva

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LONDON -- There are things to love and loathe about most companies. Today, I'm going to tell you about three things to loathe about FTSE 100 insurance group Aviva (LSE: AV  ) (NYSE: AV  ) .

I'll also be asking whether these negative factors make Aviva a poor investment today.

Silly name
I've never liked companies with daft, meaningless names. "Aviva" is one of the worst I can think of. It sounds like something a team on TV's The Apprentice would dream up.

The alpha male: "Hey, guys, we should call ourselves 'Viva' -- it says, like, you know, we're winners, long live us."

The dippy, arty one: "We could put an 'A' at the front and make it into a palindrome."

The alpha male: "Neat. Any other ideas? No? Aviva it is then."

The rebranding of a company formed by mergers of Norwich Union, Commercial Union, and General Accident was launched with a 9 million pound advertising campaign -- probably the most expensive ever in the U.K. insurance industry.

Increasing turnover
No, not a compliment on Aviva's revenue, which has been falling for the past five years, but a rebuke for the rapidly revolving door in the company's boardroom over the same period.

Current chief executive Mark Wilson is the third CEO in five years, his predecessors having stepped down after, in the first case, a failed takeover approach for Prudential, and, in the second, a shareholder revolt over executive pay. There have been innumerable other executive and non-executive departures and arrivals over the period.

Disappearing dividends
Aviva announced this week that it was cutting its final dividend by 44% and anticipates cutting its next interim by the same order. The "rebasing" is to ensure that "the current and future dividend is sustainable."

Aviva also cut its dividend in 2009 by 27% to "a sustainable level from which it can grow" -- and in 2002 by 39% to a level from which it could pursue "a progressive policy of growing dividends."

The implied payout for Aviva shareholders of 14.63 pence in the next 12 months compares with a 38 pence dividend in 2001.

A poor investment?
Do the negative factors I've highlighted make Aviva a poor investment today? In my book: yes.

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