The Lemon Fool

Posted: **May 28th, 2021, 8:54 am**

daveh wrote:
Padders72 wrote:
daveh wrote:

Not yet I'm afraid, I'm with HSDL - it will probably turn up tomorrow. Once it does it will mean I have sufficient cash for a top up (of something, but not LGEN as it is way down the HYTUSS top up list due to its large capital weighting).

Unless you are fearful of the superficial sector overlap, as you know Aviva are looking interesting for a top up at present since they have a circa £3bn chest of funds from disposals that they are planning on returning to shareholders in the next few months. How hasn't been established yet but it is sounding promising. Their ongoing yield isn't too shabby either.

Already own some Aviva and it also sits well down in the HYPTUSS top up list at 18th place again because of capital weighting. It will be interesting to see how they return capital to shareholders. Top of HYPTUSS are preference shares (AV.B and LLPC) but their price is well ahead of my purchase price and also well ahead of par so I'm a little wary, but its not really on topic for the LGEN board even if it is discussing how I'm going to reinvest the LGEN dividend.

FI like LLPC etc worry me from the POV of rising inflation which would likely put downward pressure on their values. I am currently very overweight with LLPD & BOI and have been selling down for that reason and also for diversification purposes but it served me very well during the Covid market turmoil when the payments kept rolling in. I have roughly 5% of my pot each in LGEN and AV. and do see them as rather different from each other so I share some of the sentiments above even though Dod is more negative towards the latter than I feel. I can see a combo of dividend and buyback as buybacks alone don't give a shareholder the instant warm feeling* that a Special divvi cheque does.

*and possible tax problem

Posted: **May 28th, 2021, 9:17 am**

L&G has a range of businesses which support and enhance each other and has been a good steady performer. I can't see any reason why that should not continue.

Aviva has a mismash of businesses strewn around the world and has been a serial destroyer of value. The dividend 20 years ago was 44p a share, when it was called Commercial Union as I recall. It has repeatedly 'rebased' the dividend, gradually marched it up the hill, seeming to have turned the corner, then the whole pack of cards collapses again, and the divi is once again cut. It has seemed 'cheap' for so long and always turned out not to have been cheap! Amanda Blanc has been the first CEO seemingly prepared to bite the bullet and sort it out, disposing of lots of these subsidiaries scattered round the world and about to return several billion of the proceeds to shareholders, hopefully by share buyback at depressed prices well below embedded value.

Maybe this time (again!) Aviva will come good, but I agree with Dod that L&G is a safer bet.

Posted: **May 28th, 2021, 11:39 am**

scrumpyjack wrote:I agree with Dod that L&G is a safer bet.

Ditto.

Honestly, if an entity can be a sadist, then Aviva is it!

It's bad enough in nominal terms but if we adjust for RPI then 38p for the 2000 dividend is now 66p or so in today's prices, meaning the 21p dividend for 2020 is not even a third of the purchasing power that the dividend per share had in 2000.

And your capital is substantially down, too.

If you are investing for income then growth in your dividend per share, in real terms, shouldn't be too much to ask over twenty years.

They say the past is not a guide to the future, but it does give hints. Slashing is a habit. Some companies raise the dividend each year or, at least, hold it steady. Aviva slashes and slashes. They're chained to the rhythm.

If you're looking at Aviva, take your hand off the mouse and the curser away from the 'buy'/'accept' button!

Navigate away and buy LGEN.

Best wishes

Mark

Posted: **May 28th, 2021, 11:58 am**

scrumpyjack wrote:The dividend 20 years ago was 44p a share, when it was called Commercial Union as I recall.

Commercial Union (CU) perhaps as indicated by its name had been an amalgamation of several smaller Companies. But that had been in the 1960s. Aviva had been formed not only from CU, but also from General Accident and the former mutual insurer Norwich Union, hence it was known as CGNU for a while. I think another former mutual Friends Provident came into it as well.

It does seem to have had absorbed almost as many former insurers as the specialist in that field Phoenix. Legal & General on the other hand just seems to have grown as itself.

Posted: **May 28th, 2021, 1:33 pm**

I hold both (since Jan / Feb 2017 - so not that long).

Aviva XIRR = 5.4% (but it is actually a positive number)

LGEN XIRR = 23.7%

Posted: **August 4th, 2021, 7:13 am**

H1 2021 Results: Strong financial performance –14% growth in operating profit and 22% ROE

Strong financial performance –

14% growth in operating profit and 22% ROE
Strong financial performance1, now well above pre-COVID 2019 levels
• Operating profit of £1,079m, up 14% (H1 2020: £946m), with double-digit growth or higher in LGC, LGI and LGRR
• Earnings per share of 17.78p, up 21% on H1 2019 (14.74p) and up significantly on H1 2020 (4.89p)
• Profit after tax2 of £1,065m (H1 2020: £290m) and Return on equity of 22.0% (H1 2020: 6.3%)
• Solvency II coverage ratio3 of 183% (H1 2020: 173%)
• Interim dividend of 5.18p, up 5% (H1 2020: 4.93p), consistent with our stated ambition

And later;

Subsequent to 30 June 2021, the directors declared an interim dividend of 5.18 pence per ordinary share. This dividend will be paid on 20
September 2021. It will be accounted for as an appropriation of retained earnings in the year ended 31 December 2021 and is not included
as a liability in the Consolidated Balance Sheet as at 30 June 2021.

https://www.legalandgeneralgroup.com/me ... t-pack.pdf

Posted: **October 14th, 2021, 7:14 am**

Legal & General Capital: Capital Markets Event

Legal & General Capital ("LGC") will host an event for investors and analysts today, Thursday 14 October, starting at 14:00 BST. The event will provide a detailed look into LGC's alternative asset businesses and outline why LGC is well positioned to continue to deliver attractive growth and sustainable returns.

LGC, Legal & General's primary alternative asset manufacturer, has significant investment expertise in four strategically selected sectors: housing; SME finance; specialist commercial real estate; and clean energy. The division has three objectives:

· To generate attractive risk-adjusted returns for our shareholders by investing in and developing high quality alternative assets

· To create associated long-duration alternative assets for Legal & General Retirement's growing global annuity business, and to provide compelling alternative investment opportunities for third party investors

· To make socially and environmentally useful investments that support our longstanding commitment to Inclusive Capitalism and ESG

The agenda for the event will cover the following:

https://www.investegate.co.uk/legal---3 ... 00020154P/

Posted: **October 22nd, 2021, 9:18 pm**

Back in again and SP steady as you go.

Posted: **November 26th, 2021, 4:05 pm**

Profit taking on Monday and back in today .. what is there not to like

Moderator Message:
Hello Stan, The idea of this board is to post company news (RNSes etc), and discuss company news. Ideally, we don't want the board cluttered with posters' day-to-day buying and selling. --MDW1954

Posted: **November 29th, 2021, 9:02 am**

Stan wrote:Profit taking on Monday and back in today .. what is there not to like

Moderator Message:
Hello Stan, The idea of this board is to post company news (RNSes etc), and discuss company news. Ideally, we don't want the board cluttered with posters' day-to-day buying and selling. --MDW1954

Noted MDW1954, it won't happen again

Posted: **March 6th, 2022, 9:48 am**

I note LGEN has been particularly susceptible/vulnerable to the falls arising from Putin's invasion of Ukraine. As a UK fund manager, annuity provider etc, I am puzzled why? I assume it is required to hold a significant amount in bonds, but I can't see a strong connection with Russia. Can anyone advise me what I am missing?

https://www.hl.co.uk/shares/shares-sear ... .5p-shares

Posted: **March 7th, 2022, 8:49 am**

richfool wrote:I note LGEN has been particularly susceptible/vulnerable to the falls arising from Putin's invasion of Ukraine. As a UK fund manager, annuity provider etc, I am puzzled why? I assume it is required to hold a significant amount in bonds, but I can't see a strong connection with Russia. Can anyone advise me what I am missing?

https://www.hl.co.uk/shares/shares-sear ... .5p-shares

I thought I would flag this up again, as to illustrate my point, LGEN's SP has fallen a further 6.8% today!

Posted: **March 7th, 2022, 8:59 am**

richfool wrote:
richfool wrote:I note LGEN has been particularly susceptible/vulnerable to the falls arising from Putin's invasion of Ukraine. As a UK fund manager, annuity provider etc, I am puzzled why? I assume it is required to hold a significant amount in bonds, but I can't see a strong connection with Russia. Can anyone advise me what I am missing?

https://www.hl.co.uk/shares/shares-sear ... .5p-shares

I thought I would flag this up again, as to illustrate my point, LGEN's SP has fallen a further 6.8% today!

All that sector has suffered, but it seems LGEN a little more than most. No idea why.

Posted: **March 7th, 2022, 9:04 am**

Arborbridge wrote:
richfool wrote:
richfool wrote:I note LGEN has been particularly susceptible/vulnerable to the falls arising from Putin's invasion of Ukraine. As a UK fund manager, annuity provider etc, I am puzzled why? I assume it is required to hold a significant amount in bonds, but I can't see a strong connection with Russia. Can anyone advise me what I am missing?

https://www.hl.co.uk/shares/shares-sear ... .5p-shares

I thought I would flag this up again, as to illustrate my point, LGEN's SP has fallen a further 6.8% today!

All that sector has suffered, but it seems LGEN a little more than most. No idea why.

A screaming bargain today, LGEN. Very tempted to buy some more. Sailed through covid, dare say the business will carry on as usual through the current sad situation too.

Posted: **March 7th, 2022, 3:20 pm**

https://www.constructionenquirer.com/20 ... 000-homes/

"Lovell Partnerships and Legal & General Affordable Homes have joined forces to deliver a target of 3,000 multi-tenure properties across the next five-years."

"Legal & General will focus on delivering new affordable homes, including shared ownership, social rent and affordable rent, and Lovell is bringing its open market and build expertise across all tenures."

Posted: **March 7th, 2022, 3:31 pm**

Results due Weds, expect them to beat consensus and a dividend hike. Not sure why it has suffered so much. Managed to buy at 227p this am. As mentioned sailed through covid.

IMHO the best UK dividend play.

Posted: **March 7th, 2022, 3:46 pm**

Whenever there is a crisis or large market downturn, financials - especially banks and Life Assurers, drop far more than the market. One reason with the likes of L&G is that they hold a lot of investments. So they will suffer because of the fall in the value of those investments. Remember that the value of the likes of L&G is the difference between 2 very very large figures - assets and liabilities, so relatively small adverse movements can have a large effect.

Provided that life goes on and things return to some semblance of 'normal' they tend to bounce back as sharply as they fell. So, if you have a strong stomach, it can be a good buying opportunity. I recall picking up some L&G at below 50p in the 2008 GFC, when the market was hysterically gloomy.

Posted: **March 7th, 2022, 4:48 pm**

scrumpyjack wrote:I recall picking up some L&G at below 50p in the 2008 GFC, when the market was hysterically gloomy.

The current dividend per share, then, equates to about 35% of your book cost! And you'll have long since recouped your outlay in dividends received alone. Good work.

Best wishes

Mark.

Posted: **March 9th, 2022, 7:05 am**

2021 Results: Post tax profit exceeds £2bn for the first time, with EPS of 34p, up 19% on 2019, and ROE of 20%.

Strong financial performance1
• Profit after tax2 of £2,050m, up 28% (2020: £1,607m)
• EPS3 of 34.19p, up 72% on 2020 (19.84p) and up 19% on 2019 (28.66p)
• Return on equity of 20.5% (2020: 17.3%)
• Operating profit of £2,262m, up 11% (2020: £2,041m)4
• Solvency II coverage ratio5 of 187% (2020: 175%)
• As at 7
th March 2022 we estimate the coverage ratio was 198%6
• Full year dividend of 18.45p, up 5% (2020: 17.57p), consistent with our stated ambition
Growing contribution to our five-year (2020-2024) ambitions7
• Cash generation of £1.7bn, up 12%. Capital generation of £1.6bn, up 12%
• On track to achieve our cumulative cash and capital ambitions of £8.0-9.0bn by 2024
• On track to achieve our cumulative dividend ambition of £5.6-5.9bn by 2024
Good new business volumes and strong net flows
• Global PRT new business premiums of £7.2bn (2020: £8.8bn)
• LGC alternative AUM up 10% to £3.4bn (2020: £3.1bn)
• LGIM AUM up 11% to £1.4tn, of which £479bn (34%) is International
• LGIM external net flows of £34.6bn, 85% from International clients, up 70% (2020: £20.4bn)
• Individual annuity premiums up 5% to £957m (2020: £910m)
• Lifetime mortgage and retirement interest only advances up 7% to £848m (2020: £791m)
• LGI UK & US retail protection annual premiums up 14% to £291m (2020: £255m)
“In 2021, cash and capital generation and book value per share were all up over 10% year on year,

https://group.legalandgeneral.com/media ... esults.pdf

RNS here; https://www.investegate.co.uk/legal---3 ... 00091064E/

Part two; https://www.investegate.co.uk/legal---3 ... 00201043E/

And three; https://www.investegate.co.uk/legal---3 ... 00281044E/

Posted: **March 9th, 2022, 7:31 am**

These have got to be excellent results by almost any measure with after tax profit up 28% and EPS up 72% (How did they manage that? I do not remember any share buybacks?) EPS took a beating in 2020 and they are looking at an increase in EPS from 2019 (the last 'normal' year I suppose) of 19%

Dividend up a modest 5%.

Surely undervalued at around 245p.

Dod

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