The Motley Fool

Why I Think Legal & General Group Plc Is A Screaming Buy

Legal & General (LSE: LGEN) (NASDAQOTH: LGGNY.US) is a company that has had a strong few years and, as such, I’m thinking of buying a stake in it.

Indeed, looking back on the last four years, it is clear that Legal & General has been relatively stable — especially compared to other life insurance companies.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Profit over the last four years has lacked growth but, when the highly challenging economic circumstances are taken into account, this is a decent result in my opinion.

Furthermore, although earnings per share (EPS) have dipped slightly over the period, profit has lacked the volatility of many of its peers. This gives me, a potential investor, a great deal of confidence in the business for the simple reason that, were trading conditions to deteriorate further, Legal & General has the capacity to maintain profits when many peers seemingly do not.

Of course, the future is always more important than the past and in this regard Legal & General may surprise you.

EPS is forecast to grow at a very healthy rate over the next couple of years, with the market pricing in growth of 11% this year and 9% next year. Although such rates are likely to be trumped by other financials, they tend to have been loss making and/or starting from a much lower base than Legal & General, thereby making higher growth rates easier to generate.

However, in my view, 10% growth per annum over two years when the economy is not in a boom period is pretty good.

Furthermore, Legal & General looks to offer good value at the moment — another key reason why I’m thinking of adding it to my portfolio. For instance, Legal & General trades on a price-to-book ratio of just 2.35. This may not be as low as some of its financial peers but, when the quality, reliability and track record of the business is taken into account, I think it shows that shares offer good value for money.

Certainly, goodwill of 135% of the company’s net assets does not sound expensive to me, when you consider that those assets are resilient and capable of generating a profit during a pronounced downturn.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

> Peter does not own shares in Legal & General.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.