Legal & General Share Discussion Threads

[cwa1] 09/10/2024 11:23

It's The Motley Fool...but...



Last year’s dividend per share was 20.3p. Based on a 5% increase, I expect this year’s dividend per share to come in at around 21.2p.

Following that, I expect a 2025 dividend of around 21.7p per share, followed by 22.1p in 2026 and 22.5p in 2027. If the 2% growth is maintained beyond the lifetime of the current plan, that would mean 2028 sees a dividend of 23p per share.

Given the current Legal & General share price, that means the prospective yield on a five-year basis is roughly 10.2%. I certainly find that attractive.

Things could get even better
Not only that, but I actually think that forecast might understate the size of the potential dividend five years from now (or the prospect of a special dividend along the way).

Legal & General has a strong brand, large long-term customer base and proven business model. I expect demand for retirement-linked financial products to remain strong. The company has proven it can produce sizeable excess cash flows.

[devonbeachbum] 09/10/2024 10:23

I would agree with that Tuffy - for now.

But with targeted EPS returns of up to 9% per annum for the next 3 years - mainly driven by a huge PRT pipeline - that yield may change. When others catch on this isn't a value trap I would expect some capital appreciation over the mid to long term too. I mean , which other UK companies can set out there exact divi percentages in advance over the next few years? That's what a near 9 billion insolvency surplus does for you.

[tuftymatt] 09/10/2024 09:00

As mentioned the yield is here to stay in my opinion too based on what we know right now.

From a share price perspective I don't see it going below 210 or above 260. That's ok though as if you hold at an average of the mid price or lower you can do very well in the short and long term from a total return perspective.

Good luck all 👍🏻

[123trev] 09/10/2024 08:58

Obviously this is staying flat until the contents of that budget is revealed but another big issue is how much she intends to borrow and just how much rates will have to go up there are estimates but as we no surprise the market and they will punish you as poor old Liz and Quasi found out.

[goldgeezer] 09/10/2024 08:43

It seems like a wonderful money parking spot. So good I expect significant capital appreciation to reduce the relative yield.

[devonbeachbum] 08/10/2024 17:32

I think it's worth pointing out Knee that even during the global Covid catastrophe LGen continued to pay.

For me this is the safest big dividend payer of them all. Picked up a load more at 9.4% on the overall 21.3p payment. Any doubters haven't looked at the latest half year report. Its 223% Solvency is way beyond Aviva's and Phoenix. This is the 11th biggest asset manager in the world with over a trillion AUM. OK, Simoes hasn't lit the blue touch paper but I've got no problem with the steady eddy approach. The 2% plus buybacks is fine with me and will increase the EPS more than an unsustainable increase year on year. Simoes wants steady growth and the future store percentage looks good.

[bareknee] 08/10/2024 15:15

Goldgeezer

Re "9% yield".

It's stating the obvious somewhat, but, barring some major calamity the dividend is going to rise by 2% per annum till 2027, so, unless the share price rises by more than 2% per annum, or the share price falls, then a 9% yield is here to stay over the medium term.

[goldgeezer] 08/10/2024 14:54

Is this really likely to maintain a 9% yield?

[apparition1] 08/10/2024 08:42

Hi Gecko. It's hard to get exact figures of how many schemes were affected and not. But on the Pension Regulator web site it says that the percentage of schemes in surplus in Tranche 16 which did not include the LDI debacle was 38.7% (i.e. 61.3% were in deficit). In Tranche 17 (1 year later) which did include the LDI period the percentage in surplus was 47%.

[netcurtains] 08/10/2024 08:12

m12rtn: If you want a ftse100 finance company that gives you 10% then its Phoenix PHNX (the old standard life)....

[m12rtn] 08/10/2024 07:24

Literally 9.6% dividend, if it gets to 10% I'm in for more.

[geckotheglorious] 07/10/2024 19:09

Apparition
Great to hear - but many other funds were not so lucky, hence all the fuss.

Frankly there is only so much leveraged pension funds should be engaging in to boost returns imo and such risks as highlighted should not be one of them.

"Provided companies weren't over-levered with their LDI they came out well in front"

Any idea what the percentage was for those in your above category versus those that were not so prudent in their efforts to juice returns?

[williamcooper104] 07/10/2024 05:15

Plus if pensions hadn't used LDI they'd all have blown up in the GFC when rates fell to next to nothing

[nk104] 06/10/2024 22:16

Same here. The Daily Mail etc al blethered on about the cut in the value of the assets. What they failed to mention was that the liabilities fell further.

Provided companies weren't over-levered with their LDI they came out well in front.

[apparition1] 04/10/2024 16:30

Hi Gecko not all pension schemes were hit by the LDI crisis. Only those that had written LDI's subject to collateral calls. At the time I was a trustee of a scheme with LDI's but we had insisted with LGEN that rather than be subject to a call we could just reduce the % hedge which we did so no need to find extra cash. Many more schemes did the same thing. So yes our asset value dropped but at the same time our liability values dropped so no big deal. In fact our overall financial position improved.

[pretax2] 04/10/2024 15:43

I love these BBs..

[geckotheglorious] 04/10/2024 15:40

"Two years after market chaos jeopardised Britain's 2 trillion pound ($2.7 trillion) pensions industry, the hedging strategy that exacerbated the crisis is increasing in popularity - although providers say with less of the risk."



Lessons have NOT been learned clearly

And I doubt it's with less risk either.

[mr.oz] 04/10/2024 13:40

Fancy posting a chart ?

[covid 19 deal] 04/10/2024 12:12

Breaking 200

[rongetsrich] 04/10/2024 11:36

Seems you are learning the game, at long last!!