Legal & General shares set to recover after ‘resilient’ H1 earnings
The UK-based investment management and pensions group is well-positioned to see its shares recover after unveiling a ‘resilient’ set of half-year results that saw it record strong profits and a healthy dividend.
Legal & General (L&G) shares slid 2% lower in early morning trading, but the stock is capable of trending higher in the weeks ahead after the company reported a ‘resilient’ set of half-year (H1) earnings on Wednesday.
The UK-based investment management and pensions group announced it will maintain its interim dividend of 4.93p in its H1 results, despite regulators advising financial institutions to consider cancelling pay-outs to bolster balance sheets amid the economic fallout from Covid-19.
L&G also saw strong profits despite the challenging market conditions, with the company reporting £1.13 billion in operating profit, only slightly lower than last year.
‘In H1, Legal & General delivered resilient operating profits, a robust balance sheet and highly relevant products and services,’ L&G Group CEO Nigel Wilson said. ‘Our ambition is for a similar performance in H2.’
L&G is trading at 214p per share at the time of publication, with the stock down 31% year-to-date.
L&G retains strong dividend despite Covid-19
The UK-based investment management and pensions group has remained a strong dividend play for investors at a time of great uncertainty.
Unlike many other companies on the FTSE 100, L&G opted not to suspend its dividend in an effort shore up its balance sheet amid rising costs and increased pressure from regulators.
In fact, the company’s current total dividend pay-out for 2020 stands at 17.6p per share which represents an impressive yield of 8.4%.
L&G has also grown to become one of Europe’s largest investment management firms, with asset under management worth more than £1 trillion.
Despite regulators tightening capital ratios, the company was able to retain its dividend pay-out to shareholders because of its strong Solvency II capital ratio of 184%, along with boasting earnings per share of 30.9p.
Legal & General signs annuity deal with PensionBee
Legal & General Retail Retirement has agreed a new partnership within its Retirement Income business to provide annuities to PensionBee customers.
‘For many retirees, we believe annuities continue to play an important role, especially for those seeking financial security,’ Emma Byron, managing director at L&G General Retail Retirement. ‘We are therefore really pleased to partner with PensionBee to offer customers the option of a guaranteed income from an annuity.’
This new partnership has partly been driven by forthcoming Investment Pathways regulations, which include a pathway toward a guaranteed income product, such as a lifetime annuity, L&G said in a statement.
‘While Covid-19 has delayed the implementation of the FCA's rules until February 2021, we believe savers need to be better informed of their choices today and recognise that for some, an annuity can offer peace of mind, particularly in periods of market turbulence.’ PensionBee CEO Romi Savova said.
How to trade stocks with IG
Looking to trade the Legal & General and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:
- Create an IG trading account or log in to your existing account
- Enter ‘Legal & General Group PLC’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
