June 22, 2023
Top 10 Stock Legal & General Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Legal & General – Top 10 Stock in FTSE 100 Index
Legal & General is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 57 (high 57% performer), Obermatt assesses an overall buy recommendation for Legal & General on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Life & Health Insurance |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Human Rights |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Legal & General Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 17 |
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| SENTIMENT | ||||||||
| SENTIMENT | 25 |
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| 360° VIEW | ||||||||
| 360° VIEW | 57 |
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ANALYSIS: With an Obermatt 360° View of 57 (better than 57% compared with alternatives), overall professional sentiment and financial characteristics for the stock Legal & General are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Legal & General. Only the consolidated Value Rank has an attractive rank of 69, which means that the share price of Legal & General is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 69% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 33, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 17, meaning the company has a riskier financing structure than 83% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 75% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 25. ...read more
RECOMMENDATION: With a 360° View of 57, Legal & General is better positioned than 57% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 69. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 33), a riskier financing structure than the competition (Safety Rank of 17), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 25) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Legal & General is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Legal & General. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Legal & General only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock Legal & General is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Legal & General. Analyst Opinions are at a rank of 32 (worse than 68% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Legal & General. But the Professional Investors rank is low at 35, which means that professional investors hold less stock in this company than in 65% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 33, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 67% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), Legal & General has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Legal & General Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Legal & General shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Legal & General. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 78 which means that the stock price compared with what market professionals expect for future profits is lower than for 78% of comparable companies, indicating a good value concerning Legal & General's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 58, and for Dividend Yield with a Dividend Yield Rank of 90. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 65% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 35). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a BUY recommendation based on Legal & General's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Legal & General has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Legal & General shares. ...read more
Growth Strategy: Legal & General Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Legal & General shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Legal & General. Profit Growth, with a rank of 77 (better than 77% of its competitors), and Capital Growth, with a rank of 97, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Stock Returns are at a rank of 23. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a HOLD recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Legal & General Debt Financing Safety risky
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 68 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 17 |
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ANALYSIS: With an Obermatt Safety Rank of 17 (better than 17% compared with alternatives), the company Legal & General has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Legal & General is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Legal & General. Leverage is at 60, meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors. Refinancing is at a rank of 68, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 68% of its competitors. Finally, Liquidity is also good at a rank of 52, which means that the company generates more profit to service its debt than 52% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 17 (worse than 83% compared with alternatives), Legal & General has a financing structure that is significantly riskier than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Legal & General Below-Average Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 45 |
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ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), Legal & General (Life & Health Insurance, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Legal & General are a good value (attractively priced) with a consolidated Obermatt Value Rank of 69 (better than 69% of alternatives) but show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 17), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 45, is a hold recommendation based on Legal & General's financial characteristics. As the company Legal & General's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 33) and risky financing practices (Obermatt Safety Rank of 17), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 69% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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