DB:LCO

Stock Analysis Report

Lincoln National

Executive Summary

Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States.

Rewards

Trading at 77.9% below its fair value

Earnings are forecast to grow 39.27% per year

Pays a high and reliable dividend of 2.7%

Risk Analysis

Profit margins (4.9%) are lower than last year (13.2%)



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Lincoln National's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LCO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.9%

LCO

0.4%

DE Insurance

0.07%

DE Market


1 Year Return

7.0%

LCO

27.1%

DE Insurance

14.8%

DE Market

Return vs Industry: LCO underperformed the German Insurance industry which returned 29.2% over the past year.

Return vs Market: LCO underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

LCOIndustryMarket
7 Day0.9%0.4%0.07%
30 Day-0.9%0.8%1.9%
90 Day2.9%4.5%7.1%
1 Year9.8%7.0%32.7%27.1%18.4%14.8%
3 Year-7.7%-13.4%64.7%44.8%17.4%7.0%
5 Year28.0%15.5%95.1%56.2%27.9%10.4%

Price Volatility Vs. Market

How volatile is Lincoln National's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Lincoln National undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LCO (€53.5) is trading below our estimate of fair value (€242.17)

Significantly Below Fair Value: LCO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LCO is poor value based on its PE Ratio (14.2x) compared to the Insurance industry average (11.9x).

PE vs Market: LCO is good value based on its PE Ratio (14.2x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: LCO is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: LCO is good value based on its PB Ratio (0.6x) compared to the DE Insurance industry average (1.1x).


Next Steps

Future Growth

How is Lincoln National forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

39.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LCO's forecast earnings growth (39.3% per year) is above the savings rate (-0.4%).

Earnings vs Market: LCO's earnings (39.3% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LCO's revenue (3.4% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: LCO's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LCO's Return on Equity is forecast to be low in 3 years time (11.8%).


Next Steps

Past Performance

How has Lincoln National performed over the past 5 years?

4.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LCO has high quality earnings.

Growing Profit Margin: LCO's current net profit margins (4.9%) are lower than last year (13.2%).


Past Earnings Growth Analysis

Earnings Trend: LCO's earnings have grown by 4.2% per year over the past 5 years.

Accelerating Growth: LCO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LCO had negative earnings growth (-58.5%) over the past year, making it difficult to compare to the Insurance industry average (7.8%).


Return on Equity

High ROE: LCO's Return on Equity (4.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lincoln National's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: LCO has a low level of unsold assets or inventory.

Debt Coverage by Assets: LCO's debt is covered by short term assets (assets are 4.1x debt).


Financial Institutions Analysis

Asset Level: LCO's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if LCO has a sufficient allowance for bad loans.

Low Risk Liabilities: LCO reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if LCO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: LCO has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if LCO has an appropriate level of bad loans.


Next Steps

Dividend

What is Lincoln National's current dividend yield, its reliability and sustainability?

2.66%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.5%industryaverage3.7%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: LCO's dividend (2.7%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: LCO's dividend (2.7%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: LCO's dividends per share have been stable in the past 10 years.

Growing Dividend: LCO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.4%), LCO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LCO's dividends in 3 years are forecast to be well covered by earnings (15.7% payout ratio).


Next Steps

Management

What is the CEO of Lincoln National's salary, the management and board of directors tenure and is there insider trading?

7.4yrs

Average management tenure


CEO

Dennis Glass (69yo)

12.5yrs

Tenure

US$14,422,495

Compensation

Mr. Dennis Robert Glass serves as the President and Director of The Lincoln National Life Insurance Company and served as its Chief Executive Officer. Mr. Glass serves as an Executive Officer of Lincoln Li ...


CEO Compensation Analysis

Compensation vs Market: Dennis's total compensation ($USD14.42M) is above average for companies of similar size in the German market ($USD4.52M).

Compensation vs Earnings: Dennis's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.4yrs

Average Tenure

55yo

Average Age

Experienced Management: LCO's management team is seasoned and experienced (7.4 years average tenure).


Board Age and Tenure

13.8yrs

Average Tenure

69.5yo

Average Age

Experienced Board: LCO's board of directors are seasoned and experienced ( 13.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€442,38817 Jun 19
Christine Janofsky
EntityIndividual
Role
Chief Accounting Officer
Senior VP & Chief Accounting Officer
Shares7,928
Max Price€55.80
Sell€474,91217 Jun 19
Lisa Buckingham
EntityIndividual
Role
Head of Human Resources
Executive VP and Chief People
Shares8,500
Max Price€55.87
Sell€90,07223 May 19
Kenneth Solon
EntityIndividual
Role
Chief Information Officer
Executive VP
Shares1,560
Max Price€57.74
Sell€253,19814 Mar 19
Jamie Ohl
EntityIndividual
Shares4,638
Max Price€54.59
Sell€534,51214 Feb 19
Dennis Glass
EntityIndividual
Role
Chief Executive Officer
President
Shares10,000
Max Price€53.45

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dennis Glass (69yo)

    President

    • Tenure: 12.5yrs
    • Compensation: US$14.42m
  • Chris Giovanni

    Senior VP of Investor Relations & Corporate Treasurer

    • Ken Solon (58yo)

      Executive VP

      • Tenure: 4yrs
    • Randy Freitag (56yo)

      Executive VP

      • Tenure: 9yrs
      • Compensation: US$4.51m
    • Lucy Gase

      Senior VP and Head of Administrative Services & Strategic Support

      • Tenure: 1.3yrs
    • Lisa Buckingham (53yo)

      Executive VP and Chief People

      • Tenure: 11.1yrs
      • Compensation: US$3.22m
    • Will Fuller (48yo)

      Executive VP and President of Annuities

      • Tenure: 8.8yrs
      • Compensation: US$4.35m
    • Ellen Cooper (55yo)

      Executive VP & Chief Investment Officer

      • Tenure: 7.4yrs
      • Compensation: US$3.50m
    • Christine Janofsky (41yo)

      Senior VP & Chief Accounting Officer

      • Tenure: 3.8yrs
    • Steve Harris

      Chief Ethics & Compliance Officer and Senior VP

      • Tenure: 2.8yrs

    Board Members

    • Michael Mee (76yo)

      Independent Director

      • Tenure: 19yrs
      • Compensation: US$261.00k
    • Gary Kelly (64yo)

      Independent Director

      • Tenure: 10.2yrs
      • Compensation: US$281.00k
    • Dennis Glass (69yo)

      President

      • Tenure: 12.5yrs
      • Compensation: US$14.42m
    • George Henderson (70yo)

      Independent Director

      • Tenure: 13.8yrs
      • Compensation: US$297.90k
    • Marguerite Lachman (76yo)

      Independent Director

      • Tenure: 34.7yrs
      • Compensation: US$335.40k
    • Patrick Pittard (73yo)

      Independent Director

      • Tenure: 13.8yrs
      • Compensation: US$310.40k
    • Eric Johnson (68yo)

      Independent Director

      • Tenure: 21.7yrs
      • Compensation: US$281.00k
    • Bill Cunningham (75yo)

      Non-Executive Chairman

      • Tenure: 10.7yrs
      • Compensation: US$511.00k
    • Deirdre Connelly (58yo)

      Independent Director

      • Tenure: 3.7yrs
      • Compensation: US$271.00k
    • Lynn Utter (56yo)

      Independent Director

      • Tenure: 2.2yrs
      • Compensation: US$276.00k

    Company Information

    Lincoln National Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Lincoln National Corporation
    • Ticker: LCO
    • Exchange: DB
    • Founded: 1905
    • Industry: Life and Health Insurance
    • Sector: Insurance
    • Market Cap: US$11.908b
    • Listing Market Cap: US$10.735b
    • Shares outstanding: 198.33m
    • Website: https://www.lfg.com

    Number of Employees


    Location

    • Lincoln National Corporation
    • 150 North Radnor Chester Road
    • Suite A305
    • Radnor
    • Pennsylvania
    • 19087
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    LNCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
    0JV3LSE (London Stock Exchange)YesCommon StockGBUSDJan 1969
    LCODB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

    Biography

    Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The Annuities segment offers variable, fixed, and indexed variable annuities. The Retirement Plan Services segment provides employers with retirement plan products and services primarily in the defined contribution retirement plan marketplace. This segment offers individual and group variable annuities, group fixed annuities, and mutual fund-based programs; and a range of plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services. The Life Insurance segment provides life insurance products, including term insurance, such as single and survivorship versions of universal life insurance; variable universal life insurance; and indexed universal life insurance products; and a critical illness rider. The Group Protection segment offers group non-medical insurance products comprising short and long-term disability, statutory disability and paid family medical leave administration and absence management services, term life, dental, vision and accident, and critical illness benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1905 and is headquartered in Radnor, Pennsylvania. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 21:23
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.