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The FTSE 100’s at all times stuffed with surprises. Who may have imagined a yr in the past that gold miner Fresnillo would rocket greater than 250%? Or telecoms specialist Airtel Africa would soar 215%? Not me. Each shares had largely handed my radar, till they out of the blue went gangbusters. However one other huge success story was on my watchlist, so I’m kicking myself for lacking out. It’s up a blistering 65% over 12 months so can it proceed to soar?
The inventory in query is Asia-focused insurer Prudential (LSE: PRU), which I truly owed a few a long time in the past. I banked a fast 70% achieve and whereas I’m a lot slower to promote shares lately, preferring to purchase and maintain for the long term, I don’t remorse my determination. This one has underperformed for years.
The Prudential share value soars
Prudential has big potential in Asia and Africa, promoting pension and safety merchandise to the rising center class, but the monetary disaster and years of weak regional sentiment noticed the shares largely ignored. The dividend was modest, under 2%, so I moved on.
Rising markets have lastly regained momentum, with the MSCI Rising Markets index up nearly 33% within the yr to 31 October, towards lower than 20% worldwide. Traders have waited a very long time for this second.
Prudential had already posted a robust set of 2024 outcomes, with adjusted working revenue earlier than tax up 10% to $3.1bn, whereas 2025 has been upbeat, to this point. The stability sheet’s robust, with a stable free surplus money ratio of 234%. CEO Anil Wadhwani mentioned long-term development developments in Asia and Africa are “reasserting themselves”, creating actual alternatives.
Dividends and buybacks
The board boosted the dividend 13% and returned $2bn by share buybacks throughout 2024 and 2025. Throughout 2024-2027, complete shareholder returns together with dividends may exceed $5bn.
So can this proceed? There’s nonetheless restoration potential right here. Prudential shares are down 18% during the last 5 years, and commerce decrease than they did 10 years in the past. The value-to-earnings ratio stands at 15, so it’s not precisely costly.
Analyst forecasts are optimistic, producing a median one-year goal of 1,298p. If right – and forecasts needs to be at all times be taken with a pinch of salt – that may indicate stable 12-month development of one other 23% from right here. A powerful 16 out of 18 analysts charge Prudential a Purchase, and two say Maintain. There aren’t any sellers.
It’s at all times dangerous shopping for a inventory after a robust run, chasing previous efficiency can backfire. Rising markets stay risky. Revenue seekers must also take a look at rival FTSE 100 insurers, a few of which might yield as a lot as 8% or 9%.
Nonetheless, Prudential reveals that even a long-forgotten FTSE 100 inventory can spring again, rewarding endurance and timing. The restoration in Asia and Africa is actual and complete shareholder returns beneficiant, however the path stays bumpy. Traders would possibly think about shopping for with a long-term view, whereas bracing themselves for volatility alongside the best way.
