Trading212 Portfolio- 10/08/20

Weeks summary

Stock picked: Legal and General

Ticker: LGEN

Shares added: 2.16

Total shares owned: 5.49

Dividend yield: 7.82%

Payout ratio: 85%


Dividends received: £0.14

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This weeks stock


What does Legal and General do?

Legal and General ticker LGEN comes under the financial services sector, sub sector insurances - life. LGEN provide many products and services world wide. They operate in 4 segments, Legal & General retirement (LGR), Legal & General investment management (LGIM), Legal & general capital (LGC) and Legal & General insurance (LGI).

LGR segment offer many products like annuity contracts which provide a guaranteed income over a specific period of time, lifetime mortgages and lifetime care plans. LGIM provides index fund management for example active fixed income funds, real estate funds, corporate pension schemes and many more products.

LGI segment provides products such as health insurance, disability, critical illness and accident cover. They also deal in real estate investments as well as trading, commercial loans, venture capital.

Fundimentals:

Dividend Yield: 7.82%

Payout ratio: 85.79%

Profit margin: 8.18%

Return on assets: 0.19%

Return on equity: 13.17%

P/E ratio (price to earnings): 7.44

Adjusted EPS: 30.53

EPS (Earning per share) Growth: 2%

BETA: 1.23

Cash: 21.7B

Debt: 5.85B

EBITDA: 1.75B

Stock breakdown:


Looking into Legal & General we have some interesting numbers. They have a fantastic dividend yield of 7.82%, very nice dividend income you can receive but casting our eye over to the payout ratio we see 85.79%. This number is well above what I personally like to see of 60% or less.


This stock is very much a dividend income stocks. They have lately declared a dividend which is unchanged since previous, even though first half profits have dropped by 73%. [1]

When looking at their profit margin at 8% is not too bad with basically all of the return is from equity due to the sector they are in.

The P/E ratio of 7.44 shows it is under valued slightly, this is mostly a common theme of UK stocks as they have been out of favour for a while, especially with Brexit still happening and the uncertainty in the air.


Looking at the EPS growth is at 2% so we won’t be seeing them grow much potentially. In light of the market conditions Legal & General have said it would issue a convertible note (bond) to help position itself strongly with the recovery phase from Covid 19. [2]

LGEN has a very healthy amount of Cash compared to debt, as you would hope for a insurance company.


Legal & General does look like a fairly attractive stock with the way they are handling covid, sticking by its investors by carrying on paying a dividend. But that’s the worrying thing, the payout ratio is very high. Hopefully them issuing the debt they can strongly position itself with recovery.

Currently LGEN is rated as a hold by analysts with as of May 15 out of 24 rated it hold/underperform.




Half year results of LGEN

https://www.legalandgeneralgroup.com/investors/


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Dividends received


This week we received 4 dividend this week totalling £0.14


LTC @ £0.03

CVS @ £0.05

GIS @ £0.05

MA @ £0.01


Amount for charity (Second half year): £0.60


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General account summary


Here we are finding ourselves on another Monday. The last week we have had a nice amount of dividends stream into our account. This cash flow is great and the fact we are compounding this is even better. These are only small numbers now but I can happily say that we have now gone over the £400 mark for the portfolio. This is a great milestone for the portfolio and we will be pushing for £500 very soon.


We have been lucky with the portfolio that not a huge amount have suspended the dividend. Recently in the UK many companies which did suspend have now started their dividend program again. Companies like Aviva ticker AV and BAE systems ticker BA. have both started paying again. We are very close to breaking even with the portfolio as currently we are only down £2.05 (-0.51%).

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What is:

P/E ratio EPS Payout ratio BETA Dividend

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[1] Dividend same as previous though 73% drop in profit.

https://www.ft.com/content/21414497-d31e-4956-8975-200db4203bff


[2] Bond offering

https://www.sharecast.com/news/news-and-announcements/lg-to-issue-debt-in-favourable-bond-market--7542433.html



 

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