Legal & General (LGEN)

[Dod101]

That is a real same but of course had to come eventually. A company like L & G with its very strong culture is not of course dependent on one man and I am sure will continue to develop under whoever takes over but Nigel Wilson has been one of the truly great leaders that we have produced in the last few years.

Dod

[idpickering]

That is a real same but of course had to come eventually. A company like L & G with its very strong culture is not of course dependent on one man and I am sure will continue to develop under whoever takes over but Nigel Wilson has been one of the truly great leaders that we have produced in the last few years.

Dod

I agree. As an aside, maybe, I see that LGEN are down 2.7% as I type. I'm guessing it's the news that Nigel is leaving? For me, we've all left jobs, and life and the companies still carry on. No-one is indispensable imho, and the weak LGEN SP today is over-done.

Ian.

[Dod101]

That is a real same but of course had to come eventually. A company like L & G with its very strong culture is not of course dependent on one man and I am sure will continue to develop under whoever takes over but Nigel Wilson has been one of the truly great leaders that we have produced in the last few years.

Dod

I agree. As an aside, maybe, I see that LGEN are down 2.7% as I type. I'm guessing it's the news that Nigel is leaving? For me, we've all left jobs, and life and the companies still carry on. No-one is indispensable imho, and the weak LGEN SP today is over-done.

Ian.

In what is a fairly strong market today, I would think that it is the impending loss of Nigel Wilson that is the cause. No one is indispensable, but not many leaders are as successful as he has been. An example of a not very good leader would be Alan Jope at Unilever. However, I expect that the strong and successful culture that L & G has developed over many many years will see it finding another equally good leader.

Dod

[idpickering]

That is a real same but of course had to come eventually. A company like L & G with its very strong culture is not of course dependent on one man and I am sure will continue to develop under whoever takes over but Nigel Wilson has been one of the truly great leaders that we have produced in the last few years.

Dod

I agree. As an aside, maybe, I see that LGEN are down 2.7% as I type. I'm guessing it's the news that Nigel is leaving? For me, we've all left jobs, and life and the companies still carry on. No-one is indispensable imho, and the weak LGEN SP today is over-done.

Ian.

In what is a fairly strong market today, I would think that it is the impending loss of Nigel Wilson that is the cause. No one is indispensable, but not many leaders are as successful as he has been. An example of a not very good leader would be Alan Jope at Unilever. However, I expect that the strong and successful culture that L & G has developed over many many years will see it finding another equally good leader.

Dod

Spot on Dod, thanks. I couldn’t have put it better. If I had some spare cash in my maxi ISA I’d be buying more LGEN today.

Ian.

[idpickering]

L&G Full Year Results 2022 Part 1

2022 Results: Operating profit up 12% to £2.5bn, EPS up 12% to 38.3p , ROE of 21% and Solvency coverage of 236%

Strong financial performance[1]

· Operating profit of £2,523m, up 12% (2021: £2,262m)

· Profit after tax[2] of £2,291m, up 12% (2021: £2,050m)

· EPS of 38.33p, up 12% (2021: 34.19p)

· R eturn on equity of 20.7% (2021: 20.5%)

· Solvency II coverage ratio of 236% (2021: 187%)

· As at 3rd March 2023 we estimate the coverage ratio was 240%[3]

· Full year dividend of 19.37p, up 5% (2021: 18.45p), consistent with our ambition

On track to achieve our five-year (2020-2024) ambitions[4]

· Cash generation of £1.9bn, up 14%. Capital generation of £1.8bn, up 10%

· Cumulative cash and capital generation on track with strong dividend headroom. To date:

‒ Cash generation of £5.1bn and capital generation of £4.9bn (£8.0-9.0bn by 2024)

‒ Dividends of £3.3bn (£5.6-5.9bn by 2024)

‒ Net surplus generation[5] over dividends of £0.7bn

Good new business volumes and rapidly increasing international presence

· Global PRT new business premiums of £9.5bn (2021: £7.2bn), of which 23% international

· LGC alternative AUM up 21% to £4.2bn (2021: £3.4bn), of which 12% international

· LGIM AUM of £1.2tn , of which £441bn (37%) international

· LGIM external net flows of £49.6bn (2021: £34.6bn), of which 43% international

· Protection gross premiums up 8% to £3.1bn (2021: £2.9bn), of which 39% international

" We have delivered another strong result in 2022, ahead of market expectations, with operating profit of £2.5bn and EPS of 38.3p, both up 12%, cash generation of £1.9bn up 14%, capital generation of £1.8bn up 10%, dividends up 5% to 19.37p and an ROE of 21%. Our diversified and highly synergistic business model continues to deliver significant benefits. Our balance sheet is strong and highly resilient, with a record solvency ratio of 236% and we have once again received 100% of cash flows due from our Direct Investments. At a time when many households are being affected by the rising cost of living, our commitment to inclusive capitalism is more important than ever to help improve the lives of our customers, build a better society for the long-term and create value for our shareholders."

Sir Nigel Wilson, Group Chief Executive

https://www.investegate.co.uk/legal---3 ... 00032163S/

Part 2;

https://www.investegate.co.uk/legal---3 ... 00062123S/

Subsequent to 31 December 2022, the directors declared a final dividend for 2022 of 13.93 pence per ordinary share. This dividend will be paid on 5 June 2023. It will be accounted for as an appropriation of retained earnings in the year ended 31 December 2023 and is not included as a liability in the Consolidated Balance Sheet as at 31 December 2022.

Ian (I hold).

[Dod101]

I suppose one day L & G will come unstuck but it continues to do very well at the moment. Great figures for Nigel Wilson's swan song. The gyrations of last September have not even registered in these figures. I cannot understand why the shares continue to be so lowly rated.

Dod

[idpickering]

I suppose one day L & G will come unstuck but it continues to do very well at the moment. Great figures for Nigel Wilson's swan song. The gyrations of last September have not even registered in these figures. I cannot understand why the shares continue to be so lowly rated.

Dod

Agreed Dod, thank you. And on your later point, me neither.

Ian.

[monabri]

Good set of results...shareprice down!

[Dod101]

Good set of results...shareprice down!

Actually it is quite ridiculous that the share price is down today. There is something far wrong with our stock market. I wonder what would happen if they listed in NY? You would think it was a tobacco company, pumping out these dividends with no growth in the share price. This company ought to be yielding about 2.5/3.00% at most. One problem is that L & G would be an ideal share for a DB pension fund but since they are mostly in run off they are not interested in a long term excellent company.

Dod

[scrumpyjack]

I asked Chat GPT why L&Gs shares are so lowly rated.

The answer came back:

As an AI language model, I do not have access to real-time financial information or market sentiment. However, there could be several reasons why Legal & General shares are currently lowly rated:

Industry Competition: Legal & General operates in the highly competitive insurance and financial services industry. The company faces intense competition from other players in the market, which could limit its growth prospects and impact its share price.

Economic Factors: Legal & General's share price may be influenced by wider economic factors, such as interest rates, inflation, and currency fluctuations. These factors can impact the demand for financial products and the company's profitability, which may affect its stock performance.

Company-specific Factors: There could be company-specific factors that are impacting Legal & General's share price, such as changes in leadership, regulatory issues, or legal challenges. These issues could create uncertainty around the company's future prospects and impact investor confidence.

Market Sentiment: Finally, market sentiment plays a crucial role in determining a company's share price. If investors are generally pessimistic about the industry or the company's prospects, it could lead to a lower valuation for Legal & General's shares.

It is important to note that these are just some of the possible factors that could be affecting Legal & General's share price, and it is essential to conduct thorough research and analysis before making any investment decisions.

[monabri]

I asked Chat GPT why L&Gs shares are so lowly rated.

The answer came back:

As an AI language model, I do not have access to real-time financial information or market sentiment. However, there could be several reasons why Legal & General shares are currently lowly rated:

Industry Competition: Legal & General operates in the highly competitive insurance and financial services industry. The company faces intense competition from other players in the market, which could limit its growth prospects and impact its share price.

Economic Factors: Legal & General's share price may be influenced by wider economic factors, such as interest rates, inflation, and currency fluctuations. These factors can impact the demand for financial products and the company's profitability, which may affect its stock performance.

Company-specific Factors: There could be company-specific factors that are impacting Legal & General's share price, such as changes in leadership, regulatory issues, or legal challenges. These issues could create uncertainty around the company's future prospects and impact investor confidence.

Market Sentiment: Finally, market sentiment plays a crucial role in determining a company's share price. If investors are generally pessimistic about the industry or the company's prospects, it could lead to a lower valuation for Legal & General's shares.

It is important to note that these are just some of the possible factors that could be affecting Legal & General's share price, and it is essential to conduct thorough research and analysis before making any investment decisions.

I blame the government.....as does Sir Nigel Wilson.

https://www.telegraph.co.uk/business/20 ... remy-hunt/

"The head of financial services giant Legal & General has dubbed the UK a low wage, low growth, low productivity economy as he criticised regulation on businesses. Sir Nigel Wilson said the pensions and insurance company had been held back from investing in Britain by the regulatory regime.
Ahead of Jeremy Hunt's Budget next week, he warned that the UK is "lagging miles behind right now" as the US, China and Europe try to incentivise investment in the climate industries. He told the BBC Radio 4 Today programme: "We'd like to invest a lot more here in the UK, but a combination of regulation and policy has made it very difficult to do that over the last 20, 30 years." He added: "We have to recognise we've starved our economy of growth equity, and the consequence is we are a low growth, low productivity, low wage economy fraught by political infighting. This has to change.

and

"We need the government to step up and put rules and policies in place that allow us to invest in the real economy in the UK."

[Dod101]

I asked Chat GPT why L&Gs shares are so lowly rated.

The answer came back:

As an AI language model, I do not have access to real-time financial information or market sentiment. However, there could be several reasons why Legal & General shares are currently lowly rated:

Industry Competition: Legal & General operates in the highly competitive insurance and financial services industry. The company faces intense competition from other players in the market, which could limit its growth prospects and impact its share price.

Economic Factors: Legal & General's share price may be influenced by wider economic factors, such as interest rates, inflation, and currency fluctuations. These factors can impact the demand for financial products and the company's profitability, which may affect its stock performance.

Company-specific Factors: There could be company-specific factors that are impacting Legal & General's share price, such as changes in leadership, regulatory issues, or legal challenges. These issues could create uncertainty around the company's future prospects and impact investor confidence.

Market Sentiment: Finally, market sentiment plays a crucial role in determining a company's share price. If investors are generally pessimistic about the industry or the company's prospects, it could lead to a lower valuation for Legal & General's shares.

It is important to note that these are just some of the possible factors that could be affecting Legal & General's share price, and it is essential to conduct thorough research and analysis before making any investment decisions.

That is interesting but of course (is it 'of course?) these comments are all very general. Presumably Chat will get better.

Nigel Wilson should know and it would be good if someone would just listen to him. Or move their share listing to NY. Maybe then someone would listen. His comments are though not exactly the same as I am complaining about but maybe greater investment in the UK would bring better recognition of their shares. They surely deserve a significant rerating.

Dod

Dod

[monabri]

In the Investors Chronicle yesterday. It does not seem to be paywalled.

https://www.investorschronicle.co.uk/ne ... ash-boost/

[BullDog]

In the Investors Chronicle yesterday. It does not seem to be paywalled.

https://www.investorschronicle.co.uk/ne ... ash-boost/

Yes, it's paywalled. Can be accessed via Google if anyone chooses.

[monabri]

In the Investors Chronicle yesterday. It does not seem to be paywalled.

https://www.investorschronicle.co.uk/ne ... ash-boost/

Yes, it's paywalled. Can be accessed via Google if anyone chooses.

That's strange, I don't have an IC subscription but I can read the article.

Some points from the article: the IC reports

"With a widening gap between capital generation and the level of its dividend payout, the company now has options for what to do with its surplus, in a way that underlines its importance as one of the FTSE 100’s key income shares"

"The market environment meant that rates added £9.9bn to Solvency II regulatory capital during the year"

"Despite the prospect of new management, maintaining our advice is not a difficult decision. Buy"

That is the current view from the Investors Chronicle. Obviously, DYOR.

[BullDog]

In the Investors Chronicle yesterday. It does not seem to be paywalled.

https://www.investorschronicle.co.uk/ne ... ash-boost/

Yes, it's paywalled. Can be accessed via Google if anyone chooses.

That's strange, I don't have an IC subscription but I can read the article.

Some points from the article: the IC reports

"With a widening gap between capital generation and the level of its dividend payout, the company now has options for what to do with its surplus, in a way that underlines its importance as one of the FTSE 100’s key income shares"

"The market environment meant that rates added £9.9bn to Solvency II regulatory capital during the year"

"Despite the prospect of new management, maintaining our advice is not a difficult decision. Buy"

That is the current view from the Investors Chronicle. Obviously, DYOR.

Positive reporting from Tempus in The Times, though that can be a mixed blessing. I am overweight LGEN and enjoy the dividend. I think patience will be rewarded in share price terms too, eventually.

[scotview]

Positive reporting from Tempus in The Times, though that can be a mixed blessing. I am overweight LGEN and enjoy the dividend. I think patience will be rewarded in share price terms too, eventually.

Here's today's stupid question. If I buy today and the share price goes up, will today's yield % stay the same?

[Dod101]

Positive reporting from Tempus in The Times, though that can be a mixed blessing. I am overweight LGEN and enjoy the dividend. I think patience will be rewarded in share price terms too, eventually.

Here's today's stupid question. If I buy today and the share price goes up, will today's yield % stay the same?

Obviously if the share price rises, the yield will fall at least in the short term (until the dividend is increased again when the yield will rise if the share price does not fall back). Depends of course how you measure yield. It is not an exact science and is a dynamic measure.

Dod

[monabri]

Positive reporting from Tempus in The Times, though that can be a mixed blessing. I am overweight LGEN and enjoy the dividend. I think patience will be rewarded in share price terms too, eventually.

Here's today's stupid question. If I buy today and the share price goes up, will today's yield % stay the same?

Yes.....for you! ( if I respond to the question as written).

If you buy a share of X at 100p with a dividend of 5p per share today , YOU have locked in at that dividend of 5p...or 5%. If the price were to double tomorrow and you buy then, the dividend is still 5p but you will pay 200p...effectively a yield of 2.5%....and you probably might just say to yourself......" I should have bought yesterday!"

[TUK020]

I am significantly overweight in L&G. The key speculative move I made in the COVID market mini crash was to sell some Gold ETFs and buy a chunk of L&G at £1.50. I have been trying to determine what price I should top slice.
The sp feels like it still has some room to run, so I have been sitting on my hands.
Any thoughts?