Legal & General has been one of my best ever investments

Legal & General Group Plc (LON:LGEN) (LGEN.L) has delivered relatively high total returns within my portfolio

Legal & General
Legal & General

Legal & General Group Plc (LON:LGEN) (LGEN.L) is one of my longest-ever shareholdings. It is also one of my biggest success stories to date. The very first time I purchased it was on 22 August 2005 at 112p. My best value purchase was at 36.88p on 20 February 2009. I last purchased the share on 17 October 2016 at 212.27p (all these prices are including stamp duty and dealing costs). At the time of writing the Legal & General share price is trading at 259.5p.

Legal and General has been a sound addition to my portfolio. Currently the PE is 11.6, and it also gives a relatively high dividend yield of 5.53%. The dividend is well-covered in my view: at the end of 2016 cover was 1.55 times earnings, which is higher than for SSE PLC (LON:SSE) (SSE.L) or HSBC Holdings plc (LON:HSBA) (HSBA.L), for example.

Looking at both a monthly and a three monthly chart, I think a sound buying price for Legal & General could be around 245p. This looks like the support level over the past three months to my mind. In fact, it has tested this support level a number of times and not fallen below it. My strategy would probably be to buy it and hold for at least a year, seeing as I have held the share without selling for nearly twelve years now.

Over time, Legal & General’s dividends could provide a relatively high income return in my view. There was over 7% dividend growth in 2016, over 19% growth in 2015, and nearly 21% growth in 2014. As a holder for the long term, I believe there could be capital growth potential also. Thus far, there has been a 22% rise for me since October, plus dividends.

So, at the right price I would even add more Legal & General to my portfolio, along with SSE.

About Mark Howitt 121 Articles
Mark Howitt is a long-term buy-and-hold investor who has been buying and selling shares for a number of years. He is particularly interested in the banking, energy and telecoms sectors, but also holds stocks in a variety of other industries.