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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Lincoln National Corporation (NYSE:LNC) due to its excellent fundamentals in more than one area. LNC is a financially-healthy company with a a strong history high-quality dividend payments, trading at a discount. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Lincoln National here.
Very undervalued established dividend payer
LNC’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that LNC manages its cash and cost levels well, which is a crucial insight into the health of the company. LNC seems to have put its debt to good use, generating operating cash levels of 0.3x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. LNC is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of LNC’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, LNC’s share price is trading below the group’s average. This supports the theory that LNC is potentially underpriced.
Income investors would also be happy to know that LNC is a great dividend company, with a current yield standing at 2.4%. LNC has also been regularly increasing its dividend payments to shareholders over the past decade.
For Lincoln National, there are three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for LNC’s future growth? Take a look at our free research report of analyst consensus for LNC’s outlook.
- Historical Performance: What has LNC’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LNC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.