LSE:LGEN

Stock Analysis Report

Executive Summary

Legal & General Group Plc provides various insurance products and services worldwide.


Snowflake Analysis

6 star dividend payer and undervalued.


Similar Companies

Share Price & News

How has Legal & General Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LGEN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

38.7%

LGEN

22.7%

GB Insurance

10.0%

GB Market


1 Year Return

-30.1%

LGEN

-29.4%

GB Insurance

-23.0%

GB Market

Return vs Industry: LGEN underperformed the UK Insurance industry which returned -26.5% over the past year.

Return vs Market: LGEN underperformed the UK Market which returned -22.7% over the past year.


Shareholder returns

LGENIndustryMarket
7 Day38.7%22.7%10.0%
30 Day-26.1%-19.2%-17.6%
90 Day-36.6%-28.9%-27.3%
1 Year-25.6%-30.1%-21.6%-29.4%-18.9%-23.0%
3 Year-6.2%-21.5%-18.8%-33.3%-12.9%-24.2%
5 Year-9.2%-31.6%-10.6%-33.4%1.6%-21.8%

Price Volatility Vs. Market

How volatile is Legal & General Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Legal & General Group 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: LGEN (£1.92) is trading below our estimate of fair value (£5.97)

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


Price To Earnings Ratio

PE vs Industry: LGEN is good value based on its PE Ratio (6.3x) compared to the Insurance industry average (13.2x).

PE vs Market: LGEN is good value based on its PE Ratio (6.3x) compared to the UK market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: LGEN is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LGEN is good value based on its PB Ratio (1.2x) compared to the GB Insurance industry average (1.3x).


Next Steps

Future Growth

How is Legal & General Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

4.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LGEN's forecast earnings growth (4.6% per year) is above the savings rate (0.5%).

Earnings vs Market: LGEN's earnings (4.6% per year) are forecast to grow slower than the UK market (15.4% per year).

High Growth Earnings: LGEN's earnings are forecast to grow, but not significantly.

Revenue vs Market: LGEN's revenue is expected to decline over the next 3 years (-8.9% per year).

High Growth Revenue: LGEN's revenue is forecast to decline over the next 3 years (-8.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LGEN's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has Legal & General Group performed over the past 5 years?

14.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LGEN has high quality earnings.

Growing Profit Margin: LGEN's current net profit margins (9.2%) are lower than last year (16.2%).


Past Earnings Growth Analysis

Earnings Trend: LGEN's earnings have grown by 14.5% per year over the past 5 years.

Accelerating Growth: LGEN's earnings growth over the past year (1.5%) is below its 5-year average (14.5% per year).

Earnings vs Industry: LGEN earnings growth over the past year (1.5%) underperformed the Insurance industry 4.5%.


Return on Equity

High ROE: LGEN's Return on Equity (19%) is considered low.


Next Steps

Financial Health

How is Legal & General Group'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: LGEN has a low level of unsold assets or inventory.

Debt Coverage by Assets: LGEN's debt is covered by short term assets (assets are 8.8x debt).


Financial Institutions Analysis

Asset Level: LGEN's level of assets compared to its equity is very high.

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

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

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

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

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


Next Steps

Dividend

What is Legal & General Group's current dividend yield, its reliability and sustainability?

9.14%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: LGEN's dividend (9.14%) is higher than the bottom 25% of dividend payers in the UK market (2.7%).

High Dividend: LGEN's dividend (9.14%) is in the top 25% of dividend payers in the UK market (7.3%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.6%), LGEN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LGEN's dividends in 3 years are forecast to be covered by earnings (59.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Nigel Wilson (63yo)

7.75s

Tenure

UK£4,592,000

Compensation

Dr. Nigel David Wilson serves as Group Chief Executive of Legal & General Group Plc since 2012 and serves as its Director since September 2009. Dr. Wilson joined Legal & General Group Plc as Chief Financia ...


CEO Compensation Analysis

Compensation vs Market: Nigel's total compensation ($USD5.70M) is about average for companies of similar size in the UK market ($USD5.57M).

Compensation vs Earnings: Nigel's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nigel Wilson
Group CEO & Director7.75yrsUK£4.59m0.064% £7.3m
Stuart Davies
Group CFO & Director2.83yrsUK£2.61m0.0087% £993.7k
Kerrigan Procter
CEO of Legal & General Capital and Director3yrsUK£2.47m0.015% £1.7m
Michelle Scrimgeour
CEO of Legal and General Investment Management & Director0.50yrUK£2.35mno data
Edward Houghton
Head Investor Relations1yrno datano data
Geoffrey Timms
Group General Counsel & Company Secretary21.17yrsno datano data
Richard King
Head of Group Corporate Communicationsno datano datano data
Emma Hardaker-Jones
Group Human Resources Director2.5yrsno datano data
Simon Gadd
Group Chief Risk Officer13.83yrsno datano data
Sharon Niebergall
Head of Business Managementno datano datano data

3.0yrs

Average Tenure

53yo

Average Age

Experienced Management: LGEN's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nigel Wilson
Group CEO & Director7.75yrsUK£4.59m0.064% £7.3m
Stuart Davies
Group CFO & Director2.83yrsUK£2.61m0.0087% £993.7k
Kerrigan Procter
CEO of Legal & General Capital and Director3yrsUK£2.47m0.015% £1.7m
Michelle Scrimgeour
CEO of Legal and General Investment Management & Director0.50yrUK£2.35mno data
Philip John Broadley
Independent Non-Executive Director3.67yrsUK£116.44k0.00085% £97.0k
Lesley Mary Knox
Independent Non-Executive Director3.75yrsUK£168.06k0.0013% £149.5k
Toby Strauss
Independent Non-Executive Director3.17yrsUK£115.44k0.00066% £75.3k
Julia Wilson
Senior Independent Non-Executive Director3.83yrsUK£115.37k0.00087% £99.3k
John Oliver Kingman
Chairman of the Board3.42yrsUK£496.25k0.0032% £359.4k
Henrietta Baldock
Independent Non-Executive Director1.42yrsUK£191.74k0.00019% £21.7k

3.3yrs

Average Tenure

54yo

Average Age

Experienced Board: LGEN's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: LGEN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Legal & General Group Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Legal & General Group Plc
  • Ticker: LGEN
  • Exchange: LSE
  • Founded: 1836
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: UK£11.409b
  • Shares outstanding: 5.93b
  • Website: https://www.legalandgeneralgroup.com

Number of Employees


Location

  • Legal & General Group Plc
  • One Coleman Street
  • London
  • Greater London
  • EC2R 5AA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LGGN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
LGIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
LGENLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
LGENLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
LGIBRSE (Berne Stock Exchange)YesOrdinary SharesCHCHFJan 1992
LGGN.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 1995

Biography

Legal & General Group Plc provides various insurance products and services worldwide. It operates in Legal & General Retirement (LGR), Legal & General Investment Management (LGIM), Legal & General Capital (LGC), Legal & General Insurance (LGI), and General Insurance (GI) segments. The LGR segment offers annuity contracts with guaranteed income for a specified time; longevity insurance products for company pension schemes; and lifetime mortgages. The LGIM segment provides index fund management; active fixed income and liquidity management; solution and liability driven investment; active equity; corporate pension scheme solutions; and real estate funds. The LGC segment offers investment strategy and implementation, and direct investment and structuring services. The LGI segment protection products, such as health, disability, critical illness and accident; individual term assurance; savings and death benefits; and annuities. The GI segment provides household and accident, sickness, unemployment, and pet insurance products. The company is also involved in insurance agency and brokerage, unit trust, institutional fund management, distribution, mortgage finance, treasury, SPV, building project and modular housing development, general insurance, and open ended investment businesses. It also engages in the real estate investment and trading, fund general partner, fund trustee, long term, commercial lending, venture and development capital, contractual scheme, real estate agency, private equity, management, investor alternative investment fund, collective asset-management, reinsurance, and investment management activities, as well as provides investment advisory and property services. The company was founded in 1836 and is based in London, the United Kingdom. As of December 31, 2018, Legal & General Group Plc operates as a subsidiary of Legal & General Group PLC. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 20:54
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.