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Absolutely delited to get my divi reinvested at these prices....
Spoke too soon nick; off 2.5p now.....everything reacting to US indices
M
Anyway SP up today, probably will mirror the same rises as we previously experienced since march considering all other factors, wise to reinvest the divis whilst prices are lower, Government and opposition will hopefully refuse anymore lockdowns so I see this as a better situation than 6mnths ago...
I'd doubt that it's influenced by the dividend timing. More general factors seem a more likely cause. The economic threats of EU exit and the pandemic for example. There is also the state of other finance-related businesses i.e. banks.
It's interesting what you are all saying about the SP fall recently and there seems to be no appetite for this share at the moment. I have this theory that the SP may be related to proximity to dividend dates. What I mean is, the two annual dividends are paid within a four month period and then a dividend drought for the other 8 months (very approx - you get my drift). I was looking at 5-year chart but there were too many other market variables at work to make sense of whether the share price falls in the 'dividend drought' months. Something similar may be at work with IMB who pay dividends quarterly but the Dec and March dividends have been historically almost double those in the other two quarters; but then it is a bit early to draw that conclusion about the IMB share price which has been rising steadily over the last month. Is my hypothesis flawed? On reflection I would not call it a theory! Interested in your views about such a correlation. If there is a relationship between proximity of dividends and share price then the LGEN sp should begin to rise around Feb 2021? What to you think?
Topped up yesterday whilst sp was on its arse as divi payment not due till tomorrow, sp may be higher tomorrow due to auto divi re investment, I dont think yesterdays news was horrific just government applying more common sense as people behaving like the virus had gone and needed a reminder...
I could not find any updated figures since the release of the 2020 H1 result on 5th August so I guess the drop in the last few weeks is purely due to investor sentiment caused by COVID-19 panic.
If one is buying for the dividend now seem the perfect time as the current price of 180p and a dividend of 17.57p mean a dividend yield of 9.76%. My average is 193p and I am happy to continue to average down and hold for the long term. Those that said “These guys rely on bond yields and income from investments to pass on as divi . That’s evaporating!” clearly did not read the annual report and understand LGEN and where it gets its income from.
(1) The 2019 annual report is here: https://www.legalandgeneralgroup.com/media/17715/240101077_lg_ar2019_web-ready_lo-1.pdf - page 135 - L&G gets its income from: Retirement (LGR), Investment Management (LGIM), Capital (LGC) and Insurance (LGI).
(2) The 2020 H1 result is here: https://www.legalandgeneralgroup.com/media/17912/hy20-slide-template-finalcms.pdf - page 5 - LGR up, LGIM up, LGC down, LGI down. Page 6 – dividend well covered.
(3) The forecast EPS is here https://www.marketscreener.com/quote/stock/LEGAL-GENERAL-PLC-4002140/financials/
(4) The case for buying is here https://seekingalpha.com/article/4374327-legal-generals-9-yield-is-steal-covered-1_8x-eps
The 2020 forecast EPS is 26p. At the current share price of 180p this gives a P/E of 6.923. According to (3), the 2021 forecast EPS is 29p. Using the same P/E will give a share price of 200.77p. According to (1) page 3, the dividend has grown 7% every year (apart from 2020) which gives a 2021 dividend of 18.79p. So a total profit of 200.77p - 180p + 18.79p = 39.56p which is 21.97% profit from today’s share price of 180p.
According to (3), the average P/E is 10.8. According to (4), the CAGR for EPS is 11% and 13% for the dividend. If L&G can move toward these numbers in the next few years the return will be massive.
I am happy to hold for the long term.
Nick is correct; from 138 on 23 March to 215 on 26th. That's a 56% gain. Some bounce!
Does anyone have a view as to why we have dropped 25% over the last 6 weeks?
Guess it's the general market and not company specific.
Long @ 182.45
M
It wont drop any lower, the 140 low was in the panic and crash and was extremely brief it then shot up over 200 within a couple of days, 178-190 was the happy ground with everything priced in, I have been in since april around the 180s ,this is an overreaction, most other companys stopped paying divis except LnG, even Aviva and they were making money..
It dropped to 140p earlier this year. And I say that as a holder (and ex-employee). But should provide a decent return from these levels once the economy rebounds...whenever that may be.
If this drops to 1.75 I’ll top up, surely it can’t drift much lower.