Stockchase Opinions

Alison Deans Lincoln National Corp. LNC-N TOP PICK Oct 29, 2004

Should do well if Kerry wins the election.
$43.800

Stock price when the opinion was issued

insurance
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COMMENT

Prefers Met Life (MET-N), but for similar reasons likes this as well. Likes Met Life’s international assets, most of which are growing faster than the core American business. Doesn’t expect a share buy back.

TOP PICK

She thinks there is interest in the life and integrated area. In the US there is the department of labour (DOL) ruling and this stock is immune to this ruling. They are well capitalized. It came down with the industry. There is interesting upside going forward.

PAST TOP PICK

(A Top Pick Sept 26/15. Up 24.97%.) A life insurer and she had the feeling that it was unloved. It was a value purchase. Moving forward, the fundamentals are still clear. Thinks there is good upside over the next several years.

TOP PICK

This is still on her buying list, and one that she thinks has great upside to go.

PAST TOP PICK

(Top Pick Nov 9/16, Up 17%) She continues to buy it. The story is intact for rising interest rates and lower regulation. They are well positioned to do meaningfully better going forward.

COMMENT

This insurance company is well known for annuities and life protection products. It has a cheap valuation and should benefit from rising interest rates as premiums can be invested at better values. They have a hard time distinguishing themselves in a competitive market.

BUY
It hasn't sold off that much and enjoys a lot of management insider buying.
DON'T BUY

The dividend is too high and the PE too low.

TOP PICK

They changed CEOs a few years ago. The spike in interest rates unsettled their capital ratios, so shares slid in 2022, but they've been building their capital. Are in a steady eddy business, at a 5-6x PE and pays a 5.6% dividend. Has a book value of $47 (shares are below $32). Has recurring cash flow and a great brand. He expects them to raise the dividend and buy back shares.

(Analysts’ price target is $36.46)
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TOP PICK
Stockchase Research Editor: Michael O'Reilly

LNC is a highly regarded wealth management company offering investment, insurance, annuity and other services.   It is expanding its slate by creating unique partnerships, like the recent agreement with a private equity firm.  It trades at 4x earnings, under book, and supports a 43% ROE.  Cash reserves are growing as shares are bought back and the dividend yield is backed by a payout ratio of 10% of cash flow.  We recommend setting a stop at $21, looking to achieve $37 -- upside potential of 21%.  Yield 5.9% 

(Analysts’ price target is $36.92)