Skip to main content

Why I Love Legal & General

Why I Love Legal & General.
Ticker: £LGEN

There are many reasons why i love L&G and they hold a strong position in my portfolio to represent that, to start with Legal & General is a well diversified company that believes in itself, management are buying up their own shares and the dividend they provide is incredibly resilient. This wonderful company continues to expand its assets into insurance, aging population and real estate all scalable areas of business for this company.

The Company

As a company L&G makes its money through insurance and pension schemes and is the biggest provider in these areas in the UK and has since expanded into the US market. They have over £1trillion in assets under management through its UK work pension scheme and is the UK's biggest life insurer as well as lifetime mortgage insurer.

L&G are not however concentrated on insurance, they are also building modular homes, electronic car recharging stations and retirement homes and living facilities through its city rejuvenation investments. L&G have plenty of room to expand in these areas and are setting themselves up to be well diversified for the future. From the image below we can see that despite L&G being seen as an insurance company only 11% of its income comes from insurance (LGI) and a large portion coming from their legal and general retirement institutional arm (LGRI), something that will be able to increase in scale as more and more people reach retirement age.

L&G also offer wealth management through the many funds they have setup to track groups of cmpanies, but uniquly they offer funds that provide access to unique private assets owned by legal and general such as real estate. They are also in a position to rejuvenate the areas surrounding these private assets, increasing their value alongside improving the communities they work with. Using methods like this the different arms of legal and general benefit each other increasing their value and in my opinion this company simply has so much more room to grow its cashflow with incredible scalability not being tied down to one particular asset type. 

The Dividend

 Legal & General has consistently paid their dividend from 1998 and unlike many companies, they continued to pay their dividend through the financial crises in 2008, although it was cut, it fully recovered within 4 years. They have since adopted a progressive dividend policy and have continued to grow their dividend from 2008 to present day, as i am writing this they are continuing to pay their dividend through the covid crises and is one of the very few companies that have not taken any government funds to help it survive the crises showing impressive resilience against the pandemic.

Despite currently yielding around 8% the dividend payout to shareholders only stands at around 57% of their earnings allowing for the company to grow in the many directions that i  had mentioned earlier.


Legal & General is one of my favorite companies, I hold them for their ability to continuously pay out dividends to their shareholders alongside their diversity in assets and scalability in profits. I fully believe Legal & General will be around for generations to come generating more cash flow as their business continues to expand and scale with not only aging population but with wealth management.


Popular posts from this blog

Why I Love Unilever

Why I Love Unilever. Ticker: £ULVR I love companies with big brand portfolios and the know how to manage their brands effectively. Unilever Owns over 29 active global brands and more interestingly over 169 active independent brands around the world.These brands are spread across different divisions including home care, food and refreshments and lastly beauty and personal care. The Company Unilever is a holdings company with many acquisition under its belt, it buys manages and sells brands around many different sectors, within many different industries over many different countries, this naturally gives it a layer of protection during hard times effecting individual industries or countries. If a portion of Unilever's portfolio falls, it can always re-balance and strengthen its other brands while making strategic decisions on what to do with the under performers. We can see this happening now with Unilever spinning off some of its Tea brands as a separate entity in order to push its

How My Portfolio Is Setup

The Goals of a portfolio People have many different ways they view and setup their portfolios to accomplish the goals they set out for it. Some people concentrate on capital gains, allowing their shares to appreciate in value over time, and then selling them as needed, this can be done for income or re-balancing purposes.  The goal I set out for my portfolio is to grow itself at a steady pace alongside growing its cashflow. Cashflow in a portfolio can be generated a number of ways including interest, dividends and realized capitals gains. For the cashflow in my portfolio i rely on dividend paying stocks. Why Portfolio Cashflow Is Important To Me Cashflow is important to my portfolio as it allows it to grow and expand into new companies on its own. For example, if Unilever pays me £200 in the form of a dividend, a portion of that will be re-invested into buying more shares of Unilever, therefore increasing my holding in the company and increasing the future dividends they pay me. Where