LNC Stock Overview
Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States.
Lincoln National Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$44.64|
|52 Week High||US$77.57|
|52 Week Low||US$43.88|
|1 Month Change||-9.89%|
|3 Month Change||-8.86%|
|1 Year Change||-34.86%|
|3 Year Change||-26.71%|
|5 Year Change||-39.25%|
|Change since IPO||192.72%|
Recent News & Updates
Lincoln National's Fortress Balance Sheet Pays Out Consistently
Summary 3.7% forward yield, paying out $1.80 a share in FY22. Strong risk-based capital ratio of 400%, with risk-sharing measures in place for COVID-19-related mortality. Lowest in sector risk based on net amount at risk divided by account value. Strong return on investments, with 97% of investments receiving an investment grade rating. Investment Thesis Lincoln National Corporation (LNC) is a provider of retirement, insurance, and wealth protection products, leading the market with approximately 16 million customers. LNC maintains a Risk-Based Capital Ratio (RBC) of 400%. RBC is a measure of the total cash and investments on the company's books, divided by the minimum amount of capital required to be held on hand. This means that LNC has approximately 4x the capital on hand required to be considered solvent. LNC attempts to stay at or above $450 million on hand at any time. As pandemic-related claims have come down, LNC is expecting to deliver a CAGR of 8% to EPS. Despite some minor downturns in regard to the market and persistent COVID mortality concerns, we believe that LNC is well positioned to weather any volatility and continue to pay out a consistent dividend. Lincoln National Corporation E2022 E2023 E2024 Price-to-Sales 0.5 0.4 0.4 Price-to-Earnings 6.0 4.4 3.9 EV/EBITDA 7.8 6.3 5.6 Products LNC's strategy maintains a level of fluidity to create adequate adjusted returns. This is done through the "reprice, shift, new" framework published by management. It is best boiled down as repricing underselling products, shift sales toward products that have the best demand weighted returns and adding new products that may fit a niche. The weighted average duration of assets in the portfolio is 9 years, with 13.5 years for life insurance topping the charts, and the bottom of 5.5 years for annuities. Despite unfavorable markets, the annuity lines have performed as expected, with a return on equity (ROE) of 20% reported in 1H22 and a 0.71% return on assets (ROA). Part of LNC's annuity business includes reinsurance block and flow, flow being a percentage of future premiums and block being an entire pool of accounts that already exist. The most recent deal is the Talcott VA flow agreement, which is up to $1.5 billion in sales from 2Q21-2Q23. 2Q22 LNC Report Overall, risk levels for annuities of all types are consistently below peers in net amount at risk (NAR) divided by account value ((AV)); in 1Q22 LNC had 1.1% for guaranteed minimum at death policies and 1.3% for guaranteed living benefits policies. In these percentages, the lower number is better, as they represent the difference between the face value of the plan that LNC will have to pay out versus the amount that the insured has paid into the plan plus earnings on invested cash from the account. Life insurance was hit particularly hard during COVID-19, with mortality rates being 115% (calculated by actual deaths to expected) for 2020, and 2021. 1H22's mortality rate remained higher than expected at 109%. Aging population coupled with COVID-19 mortality has increased life insurance sales for LNC by 53% year over year. To combat the added risk, sales have been shifted toward higher-premium or lower payout products. Retirement planning services have been relatively unaffected by COVID and have seen solid results despite poor market performance. Sales have grown by 34% year over year with a 7% increase in recurring deposits into accounts. However, the largest amount of revenue increase has come from expense management; since embarking on a campaign to streamline operations and replace antiquated systems LNC has saved $30 million since 2017.
Lincoln National Is A No-Brainer Buy, Here's Why
Lincoln National Corporation is a high-quality insurance company that is attractively valued at the current price. It has strong growth prospects, a well-covered dividend yield, and a history of share repurchases. I also highlight the balance sheet, valuation, and other points worth considering. There are a number of financial stocks that remain attractively priced, especially after the market drubbing in the latter part of this week. This includes Lincoln National Corp. (LNC), which, as seen below, has been rangebound since the middle of June and trades well below its 52-week high of $77.57. In this article, I highlight what makes this a good opportunity to layer into this quality dividend name, so let's get started. LNC Stock (Seeking Alpha) Why LNC? Lincoln National Corporation is a retirement, insurance, and wealth protection solutions provider that helps clients to address their lifestyle, savings and income goals, and guard against long-term care expenses. It's headquartered in Pennsylvania and was founded over a century ago, in 1905. Presently, it serves 16 million customers and has $279B in total account value. Over the trailing 12 months, it generated $19.6 billion in total revenue. LNC participates in the fast-growing U.S. markets for annuities, life insurance and workplace solutions, including group protection and retirement plan services. It also maintains a strong A- rated balance sheet with $9.6 billion of statutory surplus and an RBC (risk-based capital) ratio of 400%. Like most insurance companies, LNC invests its insurance float (premiums not yet paid out to claimants) seeking to earn a safe and healthy return, and management follows a sound investment strategy. This is reflected by the fact that 97% of LNC's investments are investment grade rated, and no one sector represents over 14% of the portfolio. As shown below, the investment portfolio is well-diversified, with financials, mortgage loans, non-cyclicals, structured investments and utilities comprising 62% of the portfolio value. LNC Investment Portfolio (Investor Presentation) LNC is demonstrating good results, with retirement plan services having positive net inflows of $913 million during the second quarter, up $517 million from the prior year period. Moreover, life insurance sales rose by 53% YoY to $193 million, and Group Protection insurance premiums were up 7% YoY to $1.2 billion. Also encouraging, book value per share excluding AOCI is up by 5.3% YoY to $79.49. For reference, AOCI refers to accumulated other comprehensive income that includes unrealized gains and losses reported in the equity section of the balance sheet. As such book value excluding AOCI is a more meaningful metric, especially during times of market volatility as what we witnessed during the second quarter of this year. Moreover, LNC is becoming a more efficient enterprise, as its expense ratio landed at 12.5%, down 50 basis points from Q2 of last year. Notably, adjusted income from operations was $2.23 during Q2, down from $3.17 in the prior year period. I'm not too concerned, however, as this was driven primarily by one-time expenses, lower income from alternative investments, and equity market volatility, and not related to structural problems with the business itself. It also appears that the market has taken these results in stride, as the share price fully recovered from its drop on August 5th (day after earnings release), before declining a bit along with the market over the past couple of days. Looking forward, LNC is targeting continued cost efficiencies in the $260-$300 million annual run-rate range through its Spark initiative, and management targets 8-10% EPS CAGR over the next few years. This could be achieved through a combination of underlying business growth as well as aggressive share repurchases. Over the past 12 months, LNC has repurchased an impressive 10% of its shares. As shown below, LNC has reduced its share count by 39% over the past 10 years.
Lincoln National declares $0.45 dividend
Lincoln National (NYSE:LNC) declares $0.45/share quarterly dividend, in line with previous. Forward yield 3.59% Payable Nov. 1; for shareholders of record Oct. 10; ex-div Oct. 7. See LNC Dividend Scorecard, Yield Chart, & Dividend Growth.
|LNC||US Insurance||US Market|
Return vs Industry: LNC underperformed the US Insurance industry which returned -2.9% over the past year.
Return vs Market: LNC underperformed the US Market which returned -23.1% over the past year.
|LNC Average Weekly Movement||5.6%|
|Insurance Industry Average Movement||4.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: LNC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: LNC's weekly volatility (6%) has been stable over the past year.
About the Company
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 fixed, variable, and indexed variable annuities.
Lincoln National Fundamentals Summary
|LNC fundamental statistics|
Is LNC overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|LNC income statement (TTM)|
|Cost of Revenue||US$14.96b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||5.16|
|Net Profit Margin||4.48%|
How did LNC perform over the long term?See historical performance and comparison
4.0%Current Dividend Yield
Does LNC pay a reliable dividends?See LNC dividend history and benchmarks
|Lincoln National dividend dates|
|Ex Dividend Date||Oct 06 2022|
|Dividend Pay Date||Nov 01 2022|
|Days until Ex dividend||10 days|
|Days until Dividend pay date||36 days|
Does LNC pay a reliable dividends?See LNC dividend history and benchmarks
Is LNC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for LNC?
Other financial metrics that can be useful for relative valuation.
|What is LNC's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does LNC's PE Ratio compare to its peers?
|LNC PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
UNM Unum Group
GL Globe Life
AEL American Equity Investment Life Holding
LNC Lincoln National
Price-To-Earnings vs Peers: LNC is good value based on its Price-To-Earnings Ratio (8.6x) compared to the peer average (9x).
Price to Earnings Ratio vs Industry
How does LNC's PE Ratio compare vs other companies in the US Insurance Industry?
Price-To-Earnings vs Industry: LNC is good value based on its Price-To-Earnings Ratio (8.6x) compared to the US Insurance industry average (13.1x)
Price to Earnings Ratio vs Fair Ratio
What is LNC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||8.6x|
|Fair PE Ratio||18.4x|
Price-To-Earnings vs Fair Ratio: LNC is good value based on its Price-To-Earnings Ratio (8.6x) compared to the estimated Fair Price-To-Earnings Ratio (18.4x).
Share Price vs Fair Value
What is the Fair Price of LNC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: LNC ($44.64) is trading below our estimate of fair value ($159.51)
Significantly Below Fair Value: LNC is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
Discover undervalued companies
How is Lincoln National forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: LNC's forecast earnings growth (19.1% per year) is above the savings rate (1.9%).
Earnings vs Market: LNC's earnings (19.1% per year) are forecast to grow faster than the US market (14.7% per year).
High Growth Earnings: LNC's earnings are forecast to grow, but not significantly.
Revenue vs Market: LNC's revenue (2.4% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: LNC's revenue (2.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: LNC's Return on Equity is forecast to be low in 3 years time (13%).
Discover growth companies
How has Lincoln National performed over the past 5 years?
Past Performance Score1/6
Past Performance Score 1/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: LNC has high quality earnings.
Growing Profit Margin: LNC's current net profit margins (4.5%) are lower than last year (7.5%).
Past Earnings Growth Analysis
Earnings Trend: LNC's earnings have declined by 15.5% per year over the past 5 years.
Accelerating Growth: LNC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: LNC had negative earnings growth (-37.6%) over the past year, making it difficult to compare to the Insurance industry average (-22.8%).
Return on Equity
High ROE: LNC's Return on Equity (9.6%) is considered low.
Discover strong past performing companies
How is Lincoln National's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: LNC's short term assets ($32.9B) exceed its short term liabilities ($12.0B).
Long Term Liabilities: LNC's short term assets ($32.9B) do not cover its long term liabilities ($314.6B).
Debt to Equity History and Analysis
Debt Level: LNC's net debt to equity ratio (19.9%) is considered satisfactory.
Reducing Debt: LNC's debt to equity ratio has increased from 36.1% to 80.5% over the past 5 years.
Debt Coverage: LNC's debt is well covered by operating cash flow (41.8%).
Interest Coverage: LNC's interest payments on its debt are well covered by EBIT (5.1x coverage).
Discover healthy companies
What is Lincoln National current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: LNC's dividend (4.03%) is higher than the bottom 25% of dividend payers in the US market (1.65%).
High Dividend: LNC's dividend (4.03%) is low compared to the top 25% of dividend payers in the US market (4.57%).
Stability and Growth of Payments
Stable Dividend: LNC's dividends per share have been stable in the past 10 years.
Growing Dividend: LNC's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (35.9%), LNC's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its low cash payout ratio (9.9%), LNC's dividend payments are thoroughly covered by cash flows.
Discover strong dividend paying companies
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Ellen Cooper (58 yo)
Ms. Ellen Gail Cooper, CERA, CFA, FSA, has served as a President, CEO and Director at Lincoln National Corporation since May 27, 2022. She served as the Director and Chairman at Lincoln Investment Advisors...
CEO Compensation Analysis
Compensation vs Market: Ellen's total compensation ($USD5.57M) is below average for companies of similar size in the US market ($USD8.51M).
Compensation vs Earnings: Ellen's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Experienced Management: LNC's management team is considered experienced (4.7 years average tenure).
Experienced Board: LNC's board of directors are seasoned and experienced ( 14.6 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|31 May 22||SellUS$2,906,500||Dennis Glass||Individual||50,000||US$58.13|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Lincoln National Corporation's employee growth, exchange listings and data sources
- Name: Lincoln National Corporation
- Ticker: LNC
- Exchange: NYSE
- Founded: 1905
- Industry: Life and Health Insurance
- Sector: Insurance
- Implied Market Cap: US$7.599b
- Shares outstanding: 170.23m
- Website: https://www.lfg.com
Number of Employees
- Lincoln National Corporation
- 150 North Radnor-Chester Road
- Suite A305
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|LNC||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Jan 1969|
|0JV3||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jan 1969|
|LCO||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jan 1969|
|L1NC34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 1 REPR 1 COM||BR||BRL||Jan 2020|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/24 00:00|
|End of Day Share Price||2022/09/23 00:00|
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.