LSE:LGEN

Stock Analysis Report

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Market Cap

UK£16.5b

Last Updated

2021/06/13 04:14 UTC

Data Sources

Company Financials +

Executive Summary

Legal & General Group Plc provides various insurance products and services in the United Kingdom, the United States, and internationally. More Details


Snowflake Analysis

6 star dividend payer and good value.


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 is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: LGEN's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-0.3%

LGEN

0.5%

GB Insurance

0.4%

GB Market


1 Year Return

23.4%

LGEN

27.9%

GB Insurance

21.3%

GB Market

Return vs Industry: LGEN underperformed the UK Insurance industry which returned 27.9% over the past year.

Return vs Market: LGEN exceeded the UK Market which returned 21.3% over the past year.


Shareholder returns

LGENIndustryMarket
7 Day-0.3%0.5%0.4%
30 Day-1.6%1.3%2.4%
90 Day-3.0%-1.2%6.9%
1 Year31.7%23.4%33.1%27.9%27.3%21.3%
3 Year29.8%5.0%5.6%-12.6%13.8%0.7%
5 Year79.3%29.2%47.5%10.6%55.1%25.8%

Long-Term 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 (£2.78) is trading below our estimate of fair value (£6.59)

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 (12.6x) compared to the UK Insurance industry average (16.7x).

PE vs Market: LGEN is good value based on its PE Ratio (12.6x) compared to the UK market (25.9x).


Price to Earnings Growth Ratio

PEG Ratio: LGEN is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: LGEN is overvalued based on its PB Ratio (1.7x) compared to the GB Insurance industry average (1.4x).


Future Growth

How is Legal & General Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

12.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LGEN's forecast earnings growth (12.3% per year) is above the savings rate (0.9%).

Earnings vs Market: LGEN's earnings (12.3% per year) are forecast to grow slower than the UK market (17.4% 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 (-0.6% per year).

High Growth Revenue: LGEN's revenue is forecast to decline over the next 3 years (-0.6% 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 (18.8%).


Past Performance

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

5.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LGEN has high quality earnings.

Growing Profit Margin: LGEN's current net profit margins (7.3%) are lower than last year (9.2%).


Past Earnings Growth Analysis

Earnings Trend: LGEN's earnings have grown by 5.4% per year over the past 5 years.

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

Earnings vs Industry: LGEN had negative earnings growth (-27.5%) over the past year, making it difficult to compare to the Insurance industry average (-20.7%).


Return on Equity

High ROE: LGEN's Return on Equity (12.9%) is considered low.


Financial Health

How is Legal & General Group's financial position?


Financial Position Analysis

Short Term Liabilities: LGEN's short term assets (£34.8B) do not cover its short term liabilities (£77.6B).

Long Term Liabilities: LGEN's short term assets (£34.8B) do not cover its long term liabilities (£483.0B).


Debt to Equity History and Analysis

Debt Level: LGEN's debt to equity ratio (759.1%) is considered high.

Reducing Debt: LGEN's debt to equity ratio has increased from 304.9% to 759.1% over the past 5 years.

Debt Coverage: LGEN's debt is not well covered by operating cash flow (5.7%).

Interest Coverage: LGEN's interest payments on its debt are well covered by EBIT (7.4x coverage).


Balance Sheet


Dividend

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

6.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LGEN's dividend (6.31%) is higher than the bottom 25% of dividend payers in the UK market (1.29%).

High Dividend: LGEN's dividend (6.31%) is in the top 25% of dividend payers in the UK market (4.02%)


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: At its current payout ratio (79.5%), LGEN's 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 (54.1% payout ratio).


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Nigel Wilson (64 yo)

9yrs

Tenure

UK£1,969,000

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Nigel's total compensation ($USD2.78M) is about average for companies of similar size in the UK market ($USD3.41M).

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


Leadership Team

Experienced Management: LGEN's management team is considered experienced (4.3 years average tenure).


Board Members

Experienced Board: LGEN's board of directors are considered experienced (3.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: LGEN insiders have sold more shares than they have bought 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£16.510b
  • 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


Biography

Legal & General Group Plc provides various insurance products and services in the United Kingdom, the United States, and internationally. It operates in four segments: Legal & General Retirement (LGR), Leg...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/13 04:14
End of Day Share Price2021/06/11 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.