Monthly Dividend Stock In Focus: Grupo Aval Acciones Y Valores

Grupo Aval Acciones y Valores (AVAL) is a financial services company that operates in Colombia and Central America. The stock also offers a dividend yield of more than 7% at the present moment.

This makes Grupo Aval a member of the high dividend stocks list.

Grupo Aval also pays a monthly dividend, which allows shareholders to receive income on a more frequent basis than the traditional quarterly schedule.

Shares of Grupo Aval have declined nearly 47% from the beginning of the year, which has caused the dividend yield to rise to its current level. But a crashing share price and a soaring yield can often be a warning sign about the underlying company’s business.

This article will discuss Grupo Aval’s business model, its prospects for growth, and whether the dividend is sustainable.

Business Overview

Founded in 1994, Grupo Aval offers a wide variety of financial services and products to both public and private sector customers in Colombia and Central America. The bank has a market capitalization of just over $5.1 billion. The Colombia-based bank provides checking and savings accounts, time deposits, cashier checks, and collection services.

Grupo Aval also provides commercial loans, including general purpose loans and leases, and consumer loans, including payroll, personal and auto loans. The bank also offers pension services, document storage, and payment and collection services. Lastly, Grupo Aval provides customers with investment fund advice and private banking.

Grupo Aval has a heavy presence in Colombia.

Source: June 2020 Investor Presentation, slide 10.

Two-thirds of assets and 56% of net income came from Colombia in the first quarter of 2020. This means that Grupo Aval’s business will almost always be directly tied to the health of its Colombia segment. A downturn in the nation’s economy would have a material impact on financial results. Fortunately, Grupo Aval has several areas of strength within the regions where it operates.

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