Summary
- Lincoln National is a profitable growth stock trading at value stock prices.
- Lincoln National has transferred responsibility for $9.6 billion in annuities to a reinsurer to manage risk.
- Since 2010, Lincoln National has reduced its shares outstanding by 34%.
Lincoln National Corporation (NYSE:LNC) has a history of solid growth and operates profitably in the life insurance industry. The stock is fairly cheap with a forward PE multiple below its industry average. The stock would suit value conscious investors looking for a growth stock.
Financials
Lincoln National has shown solid growth over the last decade with its earnings increasing 12% per year since 2010. The company’s profit margins have average around 10% and its return on equity averaged around 9%. The company’s total liabilities represent 95% of its total asset value, which is normal for financial-based companies such as insurance companies.
Lincoln National’s 2020 forward PE multiple is 6.2x with a stock price of $64. The company’s full year trailing PE multiple is 8.4x and its book value multiple is 0.8x. These multiples imply that Lincoln National is quite cheap. The average trailing PE for its industry is 9.2 (based on csimarket.com data for the Life Insurance industry), which means that Lincoln National’s trailing PE is less than its industry average.
The company pays a dividend with a forward yield of 2.36% and a trailing yield of 2.23%. The company’s dividend payout ratio is 19%.
The chart below visually shows Lincoln National’s revenue and earnings trend over the last decade along with the next two years of consensus forecasts.
Lincoln National data by ADVFN
As the above chart shows, Lincoln National’s revenue has generally increased over the last decade and the forecasts show this trend continuing into 2020. The company’s earnings have trended higher after the 2009 earnings loss. While Lincoln National’s earnings fell in 2018, the analysts are expecting company’s earnings to increase heading into 2020.
Since 2010, Lincoln National’s revenue has increased at an average rate of 6% per year, and its earnings have increased at an average rate of 12% per year.
