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LGEN Legal & General Group Plc

229.90
0.50 (0.22%)
Last Updated: 15:17:00
Delayed by 15 minutes
Legal & General Investors - LGEN

Legal & General Investors - LGEN

Share Name Share Symbol Market Stock Type
Legal & General Group Plc LGEN London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.50 0.22% 229.90 15:17:00
Open Price Low Price High Price Close Price Previous Close
232.90 229.50 232.90 229.40
more quote information »
Industry Sector
LIFE INSURANCE

Top Investor Posts

Top Posts
Posted at 02/7/2024 16:46 by richie1218
"Legal & General shares plummeted chiefly because of the firm’s new plans to cool the pace of dividend growth.

The business intends to grow 2024’s full-year dividend by 5%, as in recent years. But it intends to reduce annual growth to 2% between next year and 2027.

Its reputation as a generous dividend payer is one of Legal & General’s unique selling points. So on one hand, I can understand why the market has given the news a big thumbs down.

Still, I can’t help but feel that investors have overreacted here. Dividends haven’t been cut, after all. What’s more, the firm plans to balance out slower payout growth with share buybacks. It plans to kick this off with a £200m stock repurchase this year.

The financial services giant looks in good shape to hit these targets too. With a Solvency II ratio of 224%, it has one of the greatest balance sheets in the sector.

Investors now can get a 9.4% dividend yield for 2024 if they buy Legal & General shares. A sudden economic downturn could put pressure on that capital ratio, and in turn future dividends. But as things stand today, the firm looks in pretty good shape to me"
Posted at 18/6/2024 19:13 by richie1218
hxxps://www.ii.co.uk/analysis-commentary/city-analyst-explains-lg-buy-rating-ii532008

income investors kept Legal & General Group in their sights today as another big City firm backed the group’s long-term strategy in the wake of a punishing week for the shares.

Supported by a projection for an 11% total distribution yield in 2025, Deutsche Bank said today it saw no reason to change its “Buy” recommendation on the FTSE 100 stalwart.

It’s a view shared by retail investors as the company again topped interactive investor’s list of most traded stocks, with 90% of this morning’s activity being “Buy” orders.

This surge in demand has been consistent over the past four sessions after new L&G boss Antonio Simoes tempered some of the City’s loftier expectations.

The shares fell by more than 5% on the day of his much-anticipated strategy presentation, which included plans for £200 million a year of share buybacks and 2% dividend growth starting from next year.

This updates the previous dividend policy of 5% under predecessor Nigel Wilson, who spurned buybacks in favour of investment.

Simoes told City analysts that the combination of dividends and share buybacks meant the company intended to distribute more than what it would've otherwise with 5%.

His updated earnings guidance last Wednesday also underwhelmed, prompting Deutsche Bank to lower its per share forecasts by about 6% in today’s note.

However, the City firm believes the new estimates are more realistic and likely to be conservative looking out to the future. The guidance leads to the bank’s new price target of 275p, down from 300p previously but a jump of 21% from today’s level of 226p.

Other changes revealed by Simoes include the consolidation of four divisions into three via the creation of a new Asset Management unit. He has also split out housebuilder Cala and other non-strategic assets with a view to these being managed for value.

The strategy is underpinned by L&G’s plan to write £50-65 billion in pension risk transfer business in the UK by year-end 2028, which should increase the store of future profit and generate permanent capital to catalyse asset management growth.

Targets in asset management include cumulative annualised net new revenues of £100-150 million between 2025-28. In the third unit of retail, the company is aiming for £40-50 billion of cumulative net flows as a leading provider of workplace pensions.

Bank of America upgraded to a “Buy” recommendation on Thursday and said that short-term pain should lead to long-term gain.

It said the investment decisions being taken now at the expense of near-term payouts were likely to lead to cash generation ramping up in the outer years of forecasts. For 2024, it highlighted a 9.3% forecast dividend yield after L&G pledged to grow this year’s payout by 5% before switching to the new rate of 2% up to 2027.

The bank, which has a price target of 268p, said: “We think L&G made the right decisions for the long term, even though this led to short-term disappointment at its capital markets day.”
Posted at 12/6/2024 15:14 by richie1218
L&G to ‘make the most’ of its international business opportunities after ‘rigorous̵7; strategic review
12 Jun 24

António Simões joined Legal & General Group as CEO on 1 January 2024 from Banco Santander

Legal & General today (12 June) said it will make the most of its international business opportunities, with a particular focus on the US, after a ‘rigorous̵7; review of its strategy and financial targets.

The revamp of the business will focus on three core divisions: Institutional Retirement, Retail and Asset Management,

On the latter, L&G will create a single Asset Management division, bringing together Legal & General Investment Management (LGIM) and Legal & General Capital (LGC) as a unified, global, public and private asset manager.

L&G has also announced it will be returning more to shareholders over 2024-27, through a combination of dividends and buybacks, with 5% DPS growth to FY24 and a first share buyback of £200m in 2024, followed by 2% DPS growth per annum out to FY27 and further similar buybacks.

Legal & General Group CEO, António Simões (pictured) said: “Over the last 5 months we have rigorously reviewed our business, listening to investors, customers, partners and employees. This work has deepened my belief in our strong foundations and excellent potential.”

Almost exactly one year ago the UK FT-SE 100 index quoted insurer and financial services group announced that António Simões would become group chief executive officer of Legal & General and he officially started in the role on 1 January 2024 following regulatory approvals.

He joined from from Banco Santander where he had been regional head of Europe since September 2020. In this role, he led Santander’s businesses in the UK, Spain, Portugal and Poland, working across retail and commercial banking, corporate and investment banking, wealth management and insurance.

Prior to joining Santander, he spent 13 years at HSBC, including as CEO of UK and Europe, and latterly CEO of Global Private Banking, based in London and Hong Kong. He is a former McKinsey & Company partner.

In today’s statement, Simões continued: “L&G is in prime position to respond to and benefit from major structural and societal changes. Changing demographics, climate transition, economic uncertainty and technology are driving demand for trusted, experienced investors that can manage risk through the cycle, originate productive assets, and deliver returns for savers.

“Our vision is for a growing, simpler, better-connected L&G, focused on three core business divisions, and set apart by our shared sense of purpose and powerful synergies.

“By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society’s changing investment needs, and shift towards fee-based earnings at higher returns on capital.

“We will make the most of our international business opportunities, with a particular focus on the US.

“The strategy and targets set out today signal L&G’s ambition and commitment to invest to grow our business, and reward our shareholders for their support.”
Posted at 12/6/2024 09:56 by estienne
From the Telegraph this morning

Legal & General boss announces shake up of £1.2trn fund manager
In corporate news, Legal & General will merge its housebuilding and green energy division into the group’s larger £1.2 trillion fund manager as part of a shake-up under its new chief executive.

Our reporter Michael Bow has the latest:

New chief executive Antonio Simoes, who took over from Sir Nigel Wilson in January, has unveiled plans to combine Legal & General Capital, an alternative investment manager which builds homes and invests in infrastructure, into the larger Legal & General Investment Management.

Shares dropped by 4.4pc in early trading as Mr Simoes announced the move, which will slim down L&G from four main divisions to three.

The group’s powerhouse institutional pension insurance business, which buys out old pension schemes, and its main insurance retail arm, which has 14m customers, will remain.

The FTSE 100 giant also announced a £200m share buyback this year to please investors and said US expansion was on the cards.

Mr Simoes has been leading a root-and-branch review of the insurance giant since Sir Nigel’s departure.

He said: “Over the last five months we have rigorously reviewed our business, listening to investors, customers, partners and employees. This work has deepened my belief in our strong foundations and excellent potential.”

Antonio Simoes took over as Legal & General chief executive in January
Posted at 12/6/2024 08:26 by cocopah
Slightly relieved on the dividend front (believe it or not). As with a lot of the FTSE we are going down the buyback route (fine in theory but not so great in practice). Unfortunately for private investors (who can avoid tax through ISAs) buybacks will be the preferred option for institutional investors who hold more sway. 🤷‍a94;️
Posted at 12/6/2024 07:28 by cwa1
For the record:-



Legal & General Group CEO, António Simões said:

"Over the last 5 months we have rigorously reviewed our business, listening to investors, customers, partners and employees. This work has deepened my belief in our strong foundations and excellent potential.

L&G is in prime position to respond to and benefit from major structural and societal changes. Changing demographics, climate transition, economic uncertainty and technology are driving demand for trusted, experienced investors that can manage risk through the cycle, originate productive assets, and deliver returns for savers.

Our vision is for a growing, simpler, better-connected L&G, focused on three core business divisions, and set apart by our shared sense of purpose and powerful synergies.

By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society's changing investment needs, and shift towards fee-based earnings at higher returns on capital. We will make the most of our international business opportunities, with a particular focus on the US.

The strategy and targets set out today signal L&G's ambition and commitment to invest to grow our business, and reward our shareholders for their support."
Posted at 04/6/2024 15:52 by richie1218
Thousands of rental homes hoovered up by US giant in bet on Britain’s housing shortage
Tue, 4 June 2024

US private equity giant Blackstone has agreed to acquire a raft of new homes across the UK as it looks to cash in on soaring rents.

Up to 1,750 homes have been snapped up by Blackstone after it struck a £580m deal with developer Vistry.

The agreement is Blackstone’s second with Vistry in less than a year as it pushes further into Britain’s rental sector.

So far it has agreed to spend £1.4bn on more than 4,500 homes across the UK, supported by its investment partner Regis.

It is the latest sign that Britain’s rental sector is attracting greater levels of investment from private equity groups and pension funds.

The likes of Aviva Investors, Legal & General and Axa have all recently piled cash into the so-called build-to-rent sector, building rental properties to be managed long-term by institutional funds rather than buy-to-let landlords.

They are looking to capitalise on the extreme imbalance between supply and demand across Britain’s rental sector, which has been fuelled by private landlords selling up just as high levels of immigration push up demand.

National rent growth peaked at a record high of 9.2pc in March, before cooling to 8.9pc in April, according to the Office for National Statistics (ONS).

However, price rises have been even more extreme in London, with rents climbing by 10.8pc year on year in April.

Previously, investment in the build-to-rent sector was concentrated heavily on blocks of flats in cities that were let out primarily to graduates or white-collar workers.

However, funds are focusing increasingly on rental homes in suburban locations, targeting families unable to buy.

Blackstone’s deal with Vistry is for a portfolio of homes concentrated in the South East of England.

It will be managed by Leaf Living, which was set up by Blackstone in 2021 to manage single-family homes to rent.

James Seppala, head of European Real Estate at Blackstone, said: “Institutional private capital can play an important role in providing high-quality housing stock across the UK, particularly in the private rented sector which is significantly undersupplied today.

“Partnerships such as these can meaningfully accelerate the delivery of new homes and help alleviate structural undersupply across the sector.”

The first homes will be completed by the end of June this year, with the majority finished within the next two years.

Blackstone manages more than $1 trillion in assets and is the world’s largest alternative asset manager.

Single-family homes are the fastest-growing part of Britain’s build-to-rent sector in terms of investment.

While investment in build-to-rent flats roughly halved between 2021 and 2023, shrinking from £4.6bn to £2.6bn, investment in single-family homes nearly doubled from £1.1bn to £2bn, according to analysis by JLL property consultants.

In the first three months of this year, single-family homes accounted for the largest share of investment in the build-to-rent sector.

Investors piled £620m into build-to-rent family homes, £170m more than they spent on build-to-rent flats.

The single-family build-to-rent sector is expanding at a time when overall housebuilding has slumped, as high mortgage rates squeeze demand.

In the last three months of 2023, the number of starts on new homes slumped by 51pc year-on-year to 19,080, government data showed.

Greg Fitzgerald, chief executive at Vistry Group said: “By working in partnership with organisations like Leaf Living we can maximise the number of high-quality homes we deliver every year.

“This year we are on track to deliver more than a 10pc increase in new home completions, playing a key part in helping to address the UK’s acute housing shortage.”
Posted at 10/5/2024 12:54 by anhar
Turvart: ...What I'm trying to say in basic layman terms is this IFRS 9 & 17 accounting is hard to understand for most investors and it skews the EPS & PE figures, then by skewing the figures and investors no longer understand how to read results etc they will probably avoid buying...

I doubt very much that small investors understand much of insurance company accounts at all, whatever the prevailing accounting standards. Pros will though and they are all that matters in share pricing, not the likes of us who are irrelevant.

For historical reasons I can read accounts but am usually not bothered to do so in great detail. That's because as purely an income investor I'm concerned primarily with divis and I don't need to delve into the minutiae for this purpose.
Posted at 08/5/2024 18:47 by turvart
anhar,

You state "I think it was JM Keynes who remarked something like: the market can stay irrational longer than you can stay solvent."

Yes perhaps so but this was not what I was trying to explain regarding IFRS 9 & IFRS 17 accounting of which I very much doubt JM Keynes has any experience with. The point I was trying to make is from approx 2022 these are the new accounting standards for companies like LGEN and they are a pig to understand (I'm learning how to use the accounting standards at the moment). What I'm trying to say is these new standards skew the old fashion figures like EPS because you have a CSM (Contractual service margin) that is like a profit figure held as a fund that is released over the contractual period so because of this the old EPS figures are looking low, hence this will push the PE ratios of a company using IFRS 9 & IFRS 17 higher. When the CSM unwinds over future months/ years then the EPS will look better.

What I'm trying to say in basic layman terms is this IFRS 9 & 17 accounting is hard to understand for most investors and it skews the EPS & PE figures, then by skewing the figures and investors no longer understand how to read results etc they will probably avoid buying.

I'm a holder BTW ;-)
Posted at 09/9/2023 16:35 by pj84
I agree with the questor view that even though the dividend yield is currently at 9% it appears to be secure and likely to continue to rise and sentiment could quickly change as we are hopefully (fingers crossed) at the peak of the current interest rate cycle and the delayed impact seems to be feeding through to the economy and people on fixed rate mortgage deals will continue to come off previous low rates every month and that will continue for a few more years yet.




Extremely high dividend yields are often considered a red flag by income investors.

In many cases they are assumed to indicate a company that is struggling to afford its payouts to shareholders and is therefore likely to cut its dividend before long.

As with all things in the investment world, though, there are exceptions.

Sometimes a high-quality company that can easily afford its dividend payments ends up trading at an unjustifiably low share price that causes its yield to spike to an unusually high level.

In such situations, this column believes the risk/reward opportunity for income investors is favourably skewed.

Legal & General is an obvious example. While the FTSE 100 yields 3.9pc, the diversified financial services firm has a yield of around 9pc. This is in spite of an excellent dividend record that is unmatched by many large companies.

It maintained dividend payments throughout the pandemic and has increased them at an annualised rate of 4.2pc over the past four years.

Its investors have thereby enjoyed above-inflation income growth, since price rises have averaged 3.5pc a year over the same period.

In its half-year results, released last month, the company raised its interim dividend by 5pc and said it planned to maintain this rate of growth through to next year. Since the Bank of England expects inflation to fall to below 3pc within a year, investors in the stock should experience a further real-terms rise in their income.

Legal & General’s dividend payouts are highly sustainable, as they were covered twice by profits last year. Its financial position is sound; its “solvency ratio” of 230pc is well in excess of regulatory requirements.

As a result, the chances of dividends being paid at their current, or higher, level over the coming years remain good.

This is in spite of the negative impact of 14 consecutive interest rate rises on the company’s investment management business. Higher interest rates have inevitably suppressed asset prices and contributed to a 10pc year-on-year decline in the amount of money L&G manages in the first half of the year.

However, with interest rate rises likely to abate and the world economy’s growth prospects likely to improve, the outlook for asset managers is increasingly upbeat.

Indeed, the company’s investment management operations could swing from acting as a drag on overall performance to being a key catalyst for its financial returns, and hence its share price, as its profitability is so closely linked to the fortunes of the stock market.

Higher interest rates have had a far more positive impact on L&G’s pension risk transfer business as they have contributed to a reduction in pension deficits and growing demand for insurance policies that provide pension schemes with a guarantee that retirement benefits will be paid.

Since only 15pc of Britain’s defined benefit pension liabilities have so far been transferred to insurers, there is significant scope for growth in this area.

Clearly, the forthcoming arrival of a new chief executive represents a sizeable risk for investors; the incumbent, Sir Nigel Wilson, has overseen sound financial performance for many years. A price-to-earnings ratio of just 5.6, though, suggests that investors have more than adequately factored in the potential for strategy changes and any short-term uncertainty that may accompany them.

Dividends received or due to be paid since then amount to 49pc of our purchase price, which makes our total return roughly 36pc. None the less, negative capital returns more than six years after purchase represent a disappointing outcome for a company that is delivering sound financial performance.

When investors will warm to Legal & General is anyone’s guess.

But an extremely high yield and an exceptionally low valuation do not dovetail with a business that has a solid record of profitability, a sound financial position and clear long-term growth potential.

This column remains optimistic about the stock’s prospects and it remains a key holding in our income portfolio. Readers without a holding should consider a purchase.

Questor says: buy

Ticker: LGEN

Share price at close: 213.6p

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