Prudential has bucked the dividend crunching trend seen by the likes of Aviva and Legal & General by increasing its dividend to shareholders, despite announcing a profit drop of eight per cent.
In fact, Prudential's dividend increased by five per cent for the first six months of 2009, to 6.29p per share held. Commenting on the surprise dividend increase, Nick Raynor, investment adviser at The Share Centre said:
"It's great to see Prudential has decided to reward investors by increasing its interim dividend. Legal & General and Aviva recently chose to slash their interim payments and Prudential could have taken advantage of this in order to cut costs."
He added: "Given today's interim dividend increase and the Group's strong performance, Prudential remains our preferred life insurer. We currently list Prudential as a cautious buy, given the extreme volatility in the sector."
Prudential Group chief executive Mark Tucker reinforced this view, saying: "While we expect the business environment to remain difficult through the rest of 2009, Prudential is very well positioned to take advantage of any improvement in market conditions.
"We are well paced to continue to outperform over the economic and financial cycle."
© Fair Investment Company Ltd