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What's new? People retire and die every day. Companies that provide services in these areas are therefore on to a winner.

What's new? People retire and die every day. Companies that provide services in these areas are therefore on to a winner.

AMP happens to be among the best providers of life insurance and superannuation, which makes it worthwhile to investigate as a yield stock. Australia's $1.4 trillion super industry is among the largest in the world, thanks to compulsory employer contributions, and continues to grow about 10 per cent a year.

The bipartisan approach to compulsory retirement savings underpins the growth, even if the taxation and regulation of the industry is complex and subject to the occasional bit of tinkering, such as the Cooper review. This led to the Future of Financial Advice reforms that began on July 1.

AMP's $14 billion merger with AXA last year created a large competitor to the banks that would otherwise have dominated the sector. AMP also competes with industry funds and self-managed super funds (SMSFs). Part of the attraction of AMP is its exposure to investment markets. It has a total of about $113 billion in funds under management, placing it atop the banks and other leading fund managers. Being a manager of people's money, AMP is, of course, a large investor itself, so its earnings reflect its investment performance as well as its industry market share.

Outlook Equity markets have been soft in recent years thanks to the global financial crisis, and investors have been prepared to preserve capital by cowering in cash and term deposits, which is a godsend for capital-hungry banks. But the Australian market is poised to rebound. Depending on AMP's ability to take advantage of this softness in the market, we would expect it to perform strongly in this respect during the next few years.

Retail-fund inflow was negative last year but should begin to turn around swiftly as markets recover.

Greater investment in technology is also lowering the cost of doing business, much of which is being passed on to customers. It means that having a slick and effective distribution platform is essential, and AMP arguably has the strongest distribution capability in the industry.

At its interim result in February, AMP lowered its dividend payout range slightly to between 70 per cent and 80 per cent. The change was all about conserving capital for future business growth and greater regulatory requirements. The recent acquisition of Cavendish Group adds to the group's appeal. Cavendish is an SMSF administrator. AMP has created a new SMSF group that will appeal to people who want the individuality of an SMSF but need help maintaining it.

This part of the industry is expected to grow from $430 billion to more than $2.2 trillion by 2030, according to Deloitte Actuaries.

Price AMP's share price has traded in a band of $3.73 to $4.40 this year, suggesting the stock is waiting for a catalyst. It's current price is at the lower end of this range.

Worth buying? Investors can get into this stock at a level that will consistently deliver a very attractive gross dividend yield of about 9 per cent. AMP is very good buying at this level.

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