7% yield and P/E of 10.1! Is the Aviva share price a steal?

I Aviva (LSE: AV.) share price has performed very well this year so far. In 2024, the stock is up 11.9%. That means that over the past 12 months, Aviva is up 27.2%.

That means it's overpowered FTSE 100 in both time periods. While buying index trackers can provide a smart and easy way to build wealth over time, picking individual stocks can be incredibly profitable.

But with the stock jumping this year, could it still make a smart addition to my portfolio? I have been keeping a close eye on the insurance specialist for the past few months. With the stock price rising strongly, I think now may be the time for me to strike. Let me explain why.

The amount of money

First, I think Footsie's place looks like good value for money. It currently trades at a price-to-earnings (P/E) ratio of 10.1. That's below the FTSE 100 average of 11. For a company of Aviva's quality, I think that's a steal. Its forward IP/E is 10.5. Again, I think that looks like a great deal.

Dividend yield

Then there is its dividend yield, which currently stands at 7%. I am an investor targeting stocks that provide negligible income. Aviva's payout is well above the FTSE 100 average of 3.6%. In fact, it is the fifth highest yield in the index.

Assignments are not guaranteed. That said, I think we could see Aviva's payout increase in the coming years. I say that because management seems interested in keeping shareholders rewarded. Last year, the business increased its dividend by 8% to 33.4p per share. Its first half results this year saw its interim dividend rise 7% to 11.9p.

Looking ahead, its forward yield for next year is 7.1%. By 2026, some predict that could reach as high as 8.4%.

I'm also a fan of its share buyback plans. The latest announcement came in March, totaling £300m.

Postpone

Apart from that, there are other reasons why I work for Aviva. I have been very impressed with the transformation of the firm over the past few years. From a business that was criticized for having grown into too many layers of operations, Aviva is now at the forefront of its process of simplification.

This has accelerated since CEO Amanda Blanc took over. Under his leadership, Aviva shed its struggling divisions and focused more on profitable regions. For the first half of the year, operating profit rose 14% to £875m. That's after a solid 2023.

Accidents

Of course, the moves he has made in recent years come with risks. Focusing on a few markets leaves the business dependent on a few regions. If they do experience a downturn, this could see the stock suffer.

In addition, the insurance industry is very competitive. There is a constant threat from smaller competitors such as insurtech.

I was going shopping today

But at its current price, and its high yield, I think Aviva would be a smart buy for my portfolio. I would happily buy the stock today if I had the cash.