Legal & General Group PLC
🇬🇧 LGEN.LSE · London · GB0005603997
Insurance
GBX 255.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
31.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 255.00 ÷ 8.20 = 31.1
TTM period through: 2025-12-31
Forward P/E (estimated): 9.6
Based on analyst estimates
Reference: Provider P/E (Trailing): 31.9
Yield (Fwd)
8.63%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 8.55%
Net Debt/EBITDA (TTM)
7.2x
Latest quarter: 16.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 16.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
268.3%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 250.4%
Cash Flow Payout (TTM): 27.4%
FCF Coverage (TTM): 3.61x
ROE
17.9%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Legal & General Group is a premier UK-based insurance and asset management provider with robust core operations and a highly reliable dividend history. The stock presents an attractive entry point for dividend investors seeking income, as the temporarily elevated TTM P/E of 31.1x masks strong underlying fundamentals and a compelling forward P/E of 9.6x. Worth considering for new positions at current levels, offering an exceptionally secure 8.5% yield comprehensively covered by massive free cash flows (27% cash flow payout) while waiting for statutory earnings to normalize.
Sector Context
Legal & General Group is a premier UK-based life insurance, institutional retirement, and asset management provider offering essential financial services. In the insurance sector, high Debt/Equity ratios and elevated Net Debt/EBITDA metrics are typical of the business model, as they represent policyholder reserves and float rather than traditional corporate borrowing.
Temporary Opportunity Identified
Statutory IFRS profit was severely depressed by a £1.38 billion non-cash deficit from investment variances and restructuring charges, artificially inflating the TTM P/E to 31.1x despite core operating profit growing 6%.
📊 Strategy Analysis
- • Forward P/E of 9.6x highlights the underlying value, as the trailing P/E of 31.1x is artificially inflated by temporary, non-cash investment and liability discount variances.
- • The 8.55% dividend yield is exceptionally well-covered by cash generation, featuring a conservative cash flow payout ratio of 27.4% and robust FCF dividend coverage of 3.6x.
- • Core operating fundamentals remain highly resilient, with operating profit growing 6% year-over-year to £1.6 billion, driven by strong performance in Institutional Retirement and Retail divisions.
- • A dominant market position in the UK pension risk transfer and asset management sectors provides a formidable competitive moat with predictable long-term capital flows.
⚠ What to Watch
- • Statutory IFRS earnings remain highly sensitive to investment market volatility and liability discount rate changes, evidenced by the recent £1.38 billion deficit.
- • Elevated Net Debt/EBITDA of 7.25x and Debt/Equity of 11.0x, while characteristic of the insurance sector's capital structure (reserves/float), require ongoing monitoring amid macroeconomic shifts.
- • Persistent global inflation and geopolitical tensions could continue to pressure the investment portfolio's mark-to-market valuations in the near term.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.