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LNC

Lincoln National NYSE:LNC Stock Report

Last Price

US$44.64

Market Cap

US$7.6b

7D

-7.1%

1Y

-34.9%

Updated

24 Sep, 2022

Data

Company Financials +
LNC fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance1/6
Financial Health4/6
Dividends5/6

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

Summary of all time highs, changes and price drops for Lincoln National
Historical stock prices
Current Share PriceUS$44.64
52 Week HighUS$77.57
52 Week LowUS$43.88
Beta1.87
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 IPO192.72%

Recent News & Updates

Sep 20

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.

Aug 20

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.

Aug 11

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.

Shareholder Returns

LNCUS InsuranceUS Market
7D-7.1%-4.2%-5.2%
1Y-34.9%-2.9%-23.0%

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.

Price Volatility

Is LNC's price volatile compared to industry and market?
LNC volatility
LNC Average Weekly Movement5.6%
Insurance Industry Average Movement4.3%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
190510,848Ellen Cooperhttps://www.lfg.com

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

How do Lincoln National's earnings and revenue compare to its market cap?
LNC fundamental statistics
Market CapUS$7.60b
Earnings (TTM)US$879.00m
Revenue (TTM)US$19.64b

8.6x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LNC income statement (TTM)
RevenueUS$19.64b
Cost of RevenueUS$14.96b
Gross ProfitUS$4.67b
Other ExpensesUS$3.80b
EarningsUS$879.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)5.16
Gross Margin23.80%
Net Profit Margin4.48%
Debt/Equity Ratio80.5%

How did LNC perform over the long term?

See historical performance and comparison

Dividends

4.0%

Current Dividend Yield

36%

Payout Ratio

Does LNC pay a reliable dividends?

See LNC dividend history and benchmarks
When do you need to buy LNC by to receive an upcoming dividend?
Lincoln National dividend dates
Ex Dividend DateOct 06 2022
Dividend Pay DateNov 01 2022
Days until Ex dividend10 days
Days until Dividend pay date36 days

Does LNC pay a reliable dividends?

See LNC dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is LNC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

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

  • Analyst Forecast

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.

LNC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.7x
Enterprise Value/EBITDA9.4x
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does LNC's PE Ratio compare to its peers?

LNC PE Ratio vs Peers
The above table shows the PE ratio for LNC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average9x
UNM Unum Group
7x3.5%US$7.8b
GL Globe Life
13.8x8.7%US$9.7b
PRI Primerica
13.9x10.3%US$4.6b
AEL American Equity Investment Life Holding
2.8x-24.3%US$3.2b
LNC Lincoln National
8.6x19.1%US$7.6b

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.

LNC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8.6x
Fair PE Ratio18.4x

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.


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Future Growth

How is Lincoln National forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


19.1%

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%).


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Past Performance

How has Lincoln National performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-15.5%

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.


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Financial Health

How is Lincoln National's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

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).


Balance Sheet


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Dividend

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

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.03%

Current Dividend Yield

Upcoming Dividend Payment

TodaySep 25 2022Ex Dividend DateOct 06 2022Dividend Pay DateNov 01 202226 days from Ex DividendBuy in the next 10 days to receive the upcoming dividend

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.


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Management

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

4.7yrs

Average management tenure


CEO

Ellen Cooper (58 yo)

10.08yrs

Tenure

US$5,571,905

Compensation

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.


Leadership Team

Experienced Management: LNC's management team is considered experienced (4.7 years average tenure).


Board Members

Experienced Board: LNC's board of directors are seasoned and experienced ( 14.6 years average tenure).


Ownership

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

NYSE:LNC Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
31 May 22SellUS$2,906,500Dennis GlassIndividual50,000US$58.13

Ownership Breakdown

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


Top Shareholders

Top 25 shareholders own 62.32% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
11.4%
The Vanguard Group, Inc.
19,399,802$866.0m-0.06%0.02%
8.93%
BlackRock, Inc.
15,196,327$678.4m8.08%0.02%
8.81%
Dan Hagan
15,000,000$669.6m0%no data
4.59%
State Street Global Advisors, Inc.
7,815,638$348.9m-7.24%0.02%
2.52%
Dodge & Cox
4,297,162$191.8m0.65%0.12%
2.33%
Lyrical Asset Management LP
3,968,585$177.2m-4.31%3.29%
1.99%
FMR LLC
3,380,908$150.9m-21.56%0.01%
1.94%
Geode Capital Management, LLC
3,304,626$147.5m-0.91%0.02%
1.92%
LSV Asset Management
3,270,346$146.0m-1.68%0.31%
1.8%
Dimensional Fund Advisors LP
3,059,668$136.6m5.48%0.04%
1.66%
Invesco Capital Management LLC
2,825,800$126.1m10.36%0.1%
1.53%
J.P. Morgan Asset Management, Inc.
2,610,166$116.5m-16.12%0.02%
1.45%
Northern Trust Global Investments
2,469,553$110.2m6.01%0.02%
1.34%
Eaton Vance Management
2,283,938$102.0m-0.65%0.04%
1.13%
Stichting Pensioenfonds ABP
1,931,725$86.2m-12.63%0.13%
1.11%
Norges Bank Investment Management
1,884,345$84.1m0%0.01%
1.07%
Morgan Stanley, Investment Banking and Brokerage Investments
1,824,308$81.4m7.58%0.02%
1.05%
Columbia Management Investment Advisers, LLC
1,791,527$80.0m7.46%0.02%
1%
BNY Mellon Asset Management
1,695,220$75.7m6.07%0.02%
1%
Amundi Asset Management
1,695,060$75.7m21.03%0.02%
0.89%
AQR Capital Management, LLC
1,515,980$67.7m236.19%0.16%
0.78%
UBS Asset Management
1,329,549$59.4m-0.26%0.01%
0.78%
Charles Schwab Investment Management, Inc.
1,325,066$59.2m-1.08%0.02%
0.68%
Legal & General Investment Management Limited
1,154,708$51.5m1.49%0.02%
0.62%
Ninety One UK Limited
1,062,559$47.4m-0.93%0.08%

Company Information

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


Key Information

  • 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


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
L1NC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 COMBRBRLJan 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.