Does Legal & General Group Plc Have Greater Investment Appeal Than Barclays PLC, Standard Chartered PLC, HSBC Holdings plc And Old Mutual plc After Results?

Could an investment in Legal & General Group Plc (LON:LGEN) (LSE:LGEN.L) outperform an investment in Barclays PLC (LON:BARC) (LSE:BARC.L), Standard Chartered PLC (LON:STAN) (LSE:STAN.L), HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L) and Old Mutual plc (LON:OML) (LSE:OML.L)?

Legal & General Group Plc
Legal & General Group Plc

Legal & General Group Plc (LON:LGEN) (LSE:LGEN.L) has released 2016 results to investors today. Its long term approach to strategy and investment has led to growth in profit before tax of 17% to £1.6 billion, while net release from operations is 12% higher at £1.4 billion. Earnings per share gained 19% to 22.2p, while investors may also be encouraged to hear that return on equity was nearly 20% in 2016.

Legal & General’s solvency II surplus has increased to £5.7 billion from £5.5 billion in 2015, while its solvency II coverage ratio was 171%. It has raised dividends per share 7% to 14.35p and made progress in my opinion on new business wins. For example, LGR new business was £8.5 billion against £2.9 billion in 2015, while LGIM assets under management were £894.2 billion against £746.1 billion in 2015. Group-wide direct investment was up 39% at £10 billion.

An investment in Legal & General has registered an 8% gain in the last year. That’s behind the investment performance of financial services sector peers Barclays PLC (LON:BARC) (LSE:BARC.L), Standard Chartered PLC (LON:STAN) (LSE:STAN.L), HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L) and Old Mutual plc (LON:OML) (LSE:OML.L). An investment in Barclays is 32% higher, Old Mutual’s shares are up 18%, HSBC’s share price has gained 48% and Standard Chartered is 54% higher.

In my view, Legal & General has long term investment appeal. I feel its focus on accelerating the evolution of its USA business could be a good move and it may lead to improved investment performance. Although its shares have lagged those of Barclays, HSBC, Old Mutual and Standard Chartered in the last year, I think they could perform relatively well in future. I believe the company has relatively sound finances and a good strategy. Therefore, I think it could perform well as an investment compared to its sector peers.







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