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Legal & General: Good Yield For A Little Loved Business

Published Thu, 30 Jul 2020 15:03:49 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Financials  | United KingdomLegal & General: Good Yield For A Little Loved BusinessJul. 30, 2020 3:03 PM ET|| About: Legal & General Group Plc (LGGNF), LGGNYby: Retirement PotRetirement Pot Long only, Deep Value, Growth, foreign companiesSummaryLegal & General is a U.K.-based investment management and pensions group managing substantial assets.
It continues to pay a dividend, with an excellent yield.
The shares are often unloved but for U.K. yield hunters are a buy.
Legal & General (OTCPK: LGGNF, OTCPK: LGGNY) is a long-established U.K.-based financial services provider. Its iconic colored umbrella logo makes it a household brand in the U.K., although it operates in a number of countries.

Credit: company website
About the Business
Legal & General is a U.K.-based general financial services company. Having divested its well-known general insurance company earlier this year, it now focuses on investment, pensions and annuities. With over a trillion pounds of assets under management, it is now one of the largest investment management companies in Europe.
The company has returned consistently decent results in recent years. It has a solvency II capital coverage ratio of 184% on a shareholder basis. Current EPS of 30.9p mean that it is trading at a p/e ratio of just under 7.

Source: company annual report
In its most recent trading update on COVID-19 and market conditions towards the end of April, the company said that business performance was broadly in line with the prior year.
L&G's heavy bond exposure was a concern to some investors, but about that the company had this to say back in its April trading update:
Our £75.9 billion annuity portfolio continues to perform in line with expectations, with minimal impact from downgrades and no defaults year to date. The downgrade and default experience of the portfolio has outperformed the market due to thoughtful asset allocation and... Read more