This FTSE 250 bargain down 45% gives me a breath-taking 9% yield

I’ve been scouring the FTSE 250 for dirt-cheap dividend shares with ultra-high yields and it didn’t take me lengthy to seek out one.

Asset supervisor abrdn (LSE: ABDN) has had a depressing run since being fashioned by the £11bn merger between fund managers Customary Life and Aberdeen Asset Administration in March 2017. As we speak, the group is price a meagre £2.87bn. 

The merger failed on each entrance because the group needed to cull greater than 100 funds that principally did the identical job, blundered right into a authorized battle with Lloyds, which pulled £25bn of its fund mandate, and have become a comedy meme after its much-lampooned 2021 rebrand. Now I believe the sell-off has been overdone (or ovrdn, because the abrdn may say).

abrdn is due a cmbck

The abrdn share worth is down 27.22% over 12 months and 43.45% over 5 years. These numbers counsel there’s deep worth right here, together with a surprising dividend earnings yield that’s now a breath-taking 9.01%.

The shares look good worth at simply 11.35 occasions trailing earnings. That’s barely beneath the typical FTSE 250 P/E of 12.2 occasions.

In at present’s half-year outcomes, interim CEO Jason Windsor reported an “encouraging begin” to 2024, “as we turn into extra environment friendly, and we improve our propositions to put the foundations for development”.

Observe he mentioned “lay” the foundations. The expansion isn’t truly there but. Web working income truly fell 7% to £667m as a result of outflows and decrease margins, partly offset by improve in adviser income.

Adjusted working revenue climbed 1% to £128, largely by a 9% reduce in adjusted working bills to £539m. abrdn is on monitor to save lots of £150m a 12 months by the tip of 2025.

Tough sector

Belongings underneath administration climbed 2% to £505.9bn as a result of optimistic market actions and flows. On an IFRS foundation, final 12 months’s £169m loss swung to a £187m revenue earlier than tax.

The abrdn share worth jumped nearly 5% in early buying and selling, earlier than rapidly sliding again. It’s nonetheless low cost, after that flurry of pleasure, however one factor worries me.

I not too long ago checked FTSE 100-listed family-owned fund supervisor Schroders and it’s been going by a equally rocky time. Its shares have crashed 24.12% in a 12 months and 46.6% over three years. The inventory at present trades at 13.64 occasions earnings whereas yielding 6.4% a 12 months.

A number of FTSE 100 financials are in an identical place. Wealth supervisor M&G and asset supervisor Authorized & Basic Group instantly spring to thoughts. Each supply bumper yields whereas their shares battle to make headway. Now right here’s the factor. I maintain each in my self-invested private pension (SIPP).

I believe the asset administration sector is due a rerating, but it surely’s taking longer than I’d initially hoped. Given my publicity, I don’t want so as to add one other high-yielding struggler to my SIPP. There’s a possibility right here, however I’m already chasing it. With remorse, I’ll look elsewhere for my high-yield FTSE 250 restoration play. A lot to select from proper now!