Standard Life offers attractive returns for shareholders after Aegon deal, says UBS Proactive uses images sourced from Shutterstock
Standard Life PLC (LSE:SL.) offers one of the most attractive cash return profiles in the sector, according to UBS.
The Swiss bank said the group’s announcement last week of its acquisition of Aegon UK is both strategically and financially attractive, delivering a free cash flow yield of more than 15% and supporting a total shareholder return yield of around 10%.
UBS expects increased distributions over the next strategic plan, including annual share buybacks of around £175 million and dividend growth of about 5% a year.
The next catalyst is a new three-year plan, due later in 2026, where UBS expects upgraded targets and higher returns to shareholders.
Cash generation is forecast to rise to £6.3 billion over 2027-29, up from £5.1 billion in the current plan, leaving more than £1 billion of excess cash even after investment and payouts.
The balance sheet is also seen as resilient, with solvency expected to reach around 183% by 2029 and leverage falling below 30% this year.
UBS maintained a ‘buy’ rating and lifted its price target to 870p from 810p.