1. Schroders plc (LON:SDR.L)
Dividend Yield as of December 28: 6.86%
Schroders plc (LON:SDR.L) is a London-based multinational asset management company. It offers a wide range of investment solutions to its consumers. The stock has underperformed this year, as challenges in the broader active fund management sector weighed it down. In addition, the growing popularity of index funds continues to put pressure on active managers like Schroders, creating uncertainty for 2025. Given this trend and the stock’s poor performance during a global bull market, analysts are doubtful about its ability to recover next year. In the past 12 months, the stock has declined by over 28%.
Despite these ongoing challenges, Schroders plc (LON:SDR.L) reported solid first-half earnings. The company’s assets under management reached a record high of £773.7 billion. Wealth Management continued to perform strongly, achieving 7% growth in advised assets. In Schroders Capital, positive net new business was recorded across all four private market sectors. Moreover, mutual fund net new business saw an increase in the first half, with particularly strong momentum in fixed income. There was also notable asset growth in some of the company’s joint ventures, especially in China. On the cost side, operating expenses were reduced by 1% year-on-year, reflecting the company’s continued focus on cost discipline.
Schroders plc (LON:SDR.L) continued to deliver strong performance for its clients in the long term. Over the past year, 69% of its assets have outperformed their respective benchmarks, compared to 56% at the end of the previous year. Over a three-year period, 62% of its funds have outperformed their benchmarks.
In the first half of the year, Schroders plc (LON:SDR.L) returned £101 million to shareholders through dividends, which makes it one of the best FTSE dividend stocks on our list. Currently, the company offers an interim dividend of £0.065 per share and has a dividend yield of 6.86%, as of December 28.
Overall, Schroders plc (LON:SDR.L) ranks first on our list of the best FTSE dividend stocks. While we acknowledge the potential for SDR.L to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SDR.L but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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