An anagram of Chesnara is “earn cash”, fitting for a company that offers one of the most generous dividend yields on the stock market – over 8%.

Chesnara operates predominantly as a consolidator of life-insurance funds that are not seeking new business, and then runs them down in an orderly way. Chesnara’s overheads are extremely low because it outsources its administrative and investment operations leaving the core payroll at less than 20 employees.

Trading at a discount to embedded value (their broker forecast is 230p per share at year end) the current share price takes no account of any value that management may generate from future acquisitions. With a solid dividend yield supported by a strong solvency ratio Chesnara are a buy not just for yield but also for value and indeed could be a classic bid target for a larger player.