Lincoln National Corporation (LNC) - Reasonably Priced With Poor Growth Indicators
Lincoln National shares moved -55.9% over the last 52 weeks, with a high of $76.4 and a low of $28.61. During this time, the stock lagged the S&P 500 index by -36.0%. As of January 2022, the company's 50-day average price is $37.6702. Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. The mid-cap Financial Services company has 10,848 full time employees and is based in Radnor, PA. Lincoln National has returned a 5.9% dividend yield over the last 12 months.
An Unconvincing Cash Flow History With an Upwards trend:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | |
|---|---|---|---|
| Revenue (MM) | $17,258 | $17,556 | $19,116 |
| Revenue Growth | n/a | 1.73% | 8.89% |
| Net Margins | 5.13% | 2.84% | 7.35% |
| Net Margins Growth | n/a | -44.64% | 158.8% |
| Earnings Per Share | $4.38 | $2.56 | $7.43 |
| EPS Growth | n/a | -41.55% | 190.23% |
| Free Cash Flow (MM) | -$2,686 | $534 | $151 |
| FCF Growth | n/a | 119.88% | -71.72% |
| LT Debt to Equity | 0.31 | 0.28 | 0.3 |
Lincoln National Is Fairly priced to Earnings but Overpriced Compared to its Book Value:
Compared to the Financial Services sector's average of 13.34, Lincoln National has a trailing twelve month price to earnings (P/E) ratio of 9.5 and, based on its EPS guidance of 9.02, an expected P/E ratio of 3.4.
The firm's price to earnings growth (PEG) is -1.12, which tells us that the company is expected to have negative growth in the future.
Lincoln National's price to book (P/B) ratio is 2.3 compared to its sector average of 1.95. The company is likley overvalued in terms of its net tangible assets. As of the date of publication, the company's shares are trading -0.4% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the forumla:
√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 3.23 * 13.102) = $30.86
Lincoln National Has an Average Rating of Hold and an Analyst Consensus of Strong Upside Potential:
14 analysts are following Lincoln National and have set target prices ranging from $25 to $55 per share. On average, they have given the company a rating of hold. At the current price of $30.72, LNC is trading -22.09% away from its average analyst target price of $39.43 per share, implying an analyst consensus of strong upside potential for the stock.
The company has an average amount of shares sold short since 3.5% of the company's shares are tied to short positions. Institutions own 81.8% of Lincoln National's shares, while the insider ownership rate stands at 9.51%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $590,631,246.
