Fact based stock research
Legal & General (LSE:LGEN)

GB0005603997

How to read the free 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.

Legal & General stock research in summary

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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 low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 17), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on Legal & General's financial characteristics. As the company Legal & General's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 47), low growth (Obermatt Growth Rank of 21), and risky financing practices (Obermatt Safety Rank of 17), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	47
Growth Rank	21
Safety Rank	17
Combined Rank	45

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

This stock has achievements: Gold Winner CEO, Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Legal & General

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	51	41	47
GROWTH
GROWTH	27	51	27	21
SAFETY
SAFETY	1	17	17	17
SENTIMENT
SENTIMENT	n/a	67	1	^new
360° VIEW
360° VIEW	n/a	63	57	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Legal & General is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	51	41	47
GROWTH
GROWTH	27	51	27	21
SAFETY
SAFETY	1	17	17	17
COMBINED
COMBINED	3	45	45	45

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Legal & General the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), Legal & General shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Legal & General. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value concerning Legal & General's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 91, which means that dividends are expected to be higher than for 91% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 89% of alternatives (only 11% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on Legal & General's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	13	35	37	57
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	65	67	50	43
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	12	28	5	11
DIVIDEND YIELD
DIVIDEND YIELD	86	79	84	91
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	40	51	41	47

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Legal & General; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Legal & General shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Legal & General. While Profit Growth has a good rank of 100, as professionals currently expect the company to grow its profits more than 100% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 23, which means that currently professionals expect the company to grow less than 77% of its competitors, while Capital Growth has a rank of 11 and Stock Returns have been below market median, with a rank of 23 (77% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	1	13	89	23
PROFIT GROWTH
PROFIT GROWTH	90	75	8	100
CAPITAL GROWTH
CAPITAL GROWTH	n/a	67	7	11
STOCK RETURNS
STOCK RETURNS	50	37	45	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	27	51	27	21

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Legal & General.

Safety Metrics in Detail

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, with just one indicator above average for Legal & General and the other two below average. Refinancing is at 68, meaning 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. But Leverage is high with a rank of 13, meaning the company has an above-average debt-to-equity ratio. It has more debt than 87% of its competitors. Liquidity is also on the riskier side with a rank of 17, meaning the company generates less profit to service its debt than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated 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. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Legal & General are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Legal & General and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	1	18	18	13
REFINANCING
REFINANCING	44	68	68	68
LIQUIDITY
LIQUIDITY	13	37	24	17
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	1	17	17	17

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Legal & General and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	42	30	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	72	21	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	3	^new
MARKET PULSE
MARKET PULSE	n/a	12	9	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	67	1	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Legal & General.
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