Factors That Make Lincoln National Stock a Lucrative Bet Now

Core Viewpoint - Lincoln National Corporation (LNC) is experiencing strong performance in its Annuities and Group Protection segments, supported by strategic product shifts, effective expense management, technology adoption, and a solid financial foundation [1]. Financial Performance - The Zacks Consensus Estimate for Lincoln National's 2024 earnings is $6.98 per share, reflecting a year-over-year increase of 33.7%. Revenue is estimated at $18.4 billion, indicating a 14.8% year-over-year growth [2]. - LNC's earnings have exceeded estimates in the last four quarters, with an average surprise of 15.85% [3]. - The consensus estimate for 2025 earnings is $7.61 per share, representing a 9% increase from the 2024 estimate, while revenues are projected at $19.2 billion, implying a 4.3% growth from 2024 [19]. Business Segments - Revenue growth is driven by the strong performance of the Annuities and Group Protection segments, with increased account values and improved spread income contributing to the Annuities segment's success [4]. - The Group Protection unit has seen a 28.7% year-over-year increase in operating income during the first nine months of 2024, aided by expanded scale, broader distribution networks, and strategic acquisitions [22]. Financial Stability - Lincoln National maintains a robust financial position, with cash and invested cash reaching $6 billion as of September 30, 2024, a 78.7% increase from the end of 2023. This strong cash position allows the company to pursue growth opportunities and strategically distribute capital [5]. - The company's dividend yield stands at 5.7%, higher than the industry average of 3.2% [5]. Valuation Metrics - Lincoln National's price-to-book (P/B) ratio is 0.67, significantly lower than the life insurance industry's trailing 12-month P/B ratio of 1.96, indicating that the stock is currently undervalued [12]. - The return on equity for LNC is 18.2%, surpassing the industry average of 15.5%, demonstrating the company's efficiency in utilizing shareholders' funds [21]. Strategic Focus - The company serves approximately 17 million customers, positioning itself for sustained sales growth. It is shifting its product mix towards offerings without long-term guarantees to reduce sensitivity to interest rate fluctuations [14]. - Ongoing expense management initiatives have supported margin improvements, while the adoption of advanced technologies has enhanced operational efficiency and customer experience [14].