Is it Time to Dump Your AMP Shares?

The share price of AMP Ltd [ASX:AMP] has plummeted today on the back of the company’s full year results for 2020.

At the time of writing, shares in the finance and banking firm have dropped by 9.09%, or 14 cents, to trade at $1.40 per share.


Source: TradingView

The dumping of AMP stock comes as the company reveals its US-based suitor, Ares Management, dropped its $6 billion takeover offer late last night.

And shareholders won’t be getting anything for their woes, as the company said it will scrap its final dividend this year.

But with AMP stating its commitment to restarting a $200 million share buyback program, should you be thinking about offloading your stock?

A sinking ship?

AMP is in need of more than a fresh coat of paint. It needs an entire renovation.

A prospect that some investors were upbeat about — until Ares Management was no longer interested in purchasing the company.

Any chance for meaningful change at the firm has been thrown out the window.

With the big four banks offloading their wealth management arms over the past few years, it is clear the industry is not what it once was.

Check Out These Five Aussie Superstars Paying Top Dividends. Claim Your Free Report Now.

And AMP looks like it’s trapped in the past.

In its full year report to December 2020, the embattled wealth management firm said its underlying net profit dropped by 32.8% to $295 million.

However, its statutory profit of $177 million for the year did put the company back in the black after a $2.5 billion loss the previous year.

Though that profit came on the back of a 12.6% drop in revenue from its continuing operations of $2.33 billion.

Assets under management in its financial advice and superannuation businesses fell 8% over the year, or by $8.3 billion.

And AMP Capital suffered a 7% tumble in assets under management.

AMP is a relic

Whether you are prepared to accept it or not, AMP is a relic of the past.

A window into the financial landscape of Australia’s past.

For better or for worse, the game has changed and has left AMP behind.

AMP shares are now valued at less than Ares Management’s $1.85 per-share takeover offer.

Its executives have either abandoned ship or have been thrown overboard.

And even the company’s own attempts to improve its culture have stalled.

There may still be parts of the business to salvage. However, if you’re looking to get in on the rebound in Aussie dividends, perhaps AMP is not the stock.

However, if you’re looking for companies with a great chance of maintaining solid dividend payouts, be sure to check out our dividend report, where we reveal five Aussie superstars that are paying top dividends and are set to thrive in the post-pandemic era. Claim your free report now.


Lachlann Tierney,

For The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion