LNC  Lincoln National Corporation

Exchange

NYSE

Sector

Finance

Industry

Life Insurance

Market Cap.

16.96B

Current Price

$76.59
+0.805 (+1.062%)

Book Price

$47.72
Overvalued by 37.69%
Financial Institution

Company Metrics

  • P/E 11.667
  • P/S 1.211
  • P/B 1.053
  • EPS 6.564
  • Dividend 1.16 / 1.52%
  • Avg. Vol. 1.26M
  • Shares 221.45M
  • Market Cap. 16.96B

Company Description

Lincoln National Corporation, through its subsidiaries, engages in multiple insurance and retirement businesses in the United States. It sells a range of wealth protection, accumulation, and retirement income products and solutions. These products include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance (VUL), linked-benefit UL, term... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

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Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for LNC to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate LNC's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

Poor Cash Return on Invested Capital over the past 5 years

LNC has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

LNC has only created $- of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow - - - - -
divided by
Invested Capital 218.87B 236.95B 253.38B 251.94B 261.63B
Cash ROIC - - - - -

Poor Return on Equity over the past 5 years

LNC has shown an inability to deliver strong results for shareholders. This could be due to poor management, LNC operating in a highly competitive industry, or having a weak business in general.

LNC has only generated $8.87 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.31B 1.24B 1.52B 1.15B 1.19B
divided by
Stockholders' Equity 14.97B 13.45B 15.74B 13.62B 14.48B
Return on Equity 8.77% 9.25% 9.63% 8.47% 8.23%

Poor Business Performance over the past 10 years

LNC's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

LNC has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow - - - - - - - - - -

Consistent Reinvestment of Profits over the past 10 years

LNC has consistently retained profits. This may put LNC in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, LNC can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 4.29B 3.75B 3.32B 3.93B 4.13B 4.04B 5.01B 6.02B 6.47B 7.04B
Retained Earnings Growth - -12.76% -11.46% 18.64% 4.88% -1.99% 23.96% 20.13% 7.51% 8.79%

Highly Competitive Industry over the past 10 years

It's likely that LNC is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely LNC invests heavily in R&D and Sales, General & Administrative expenses.

Only $- of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.22B 57.00M -485.00M 980.00M 294.00M 1.31B 1.24B 1.52B 1.15B 1.19B
divided by
Revenue - - - - - - - - - -
Net Profit Margin - - - - - - - - - -

Weak Pricing Power over the past 10 years

LNC is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that LNC has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue - - - - - - - - - -
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

LNC has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that LNC may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - - - - - - - - -
divided by
Net Income 1.22B 57.00M -485.00M 980.00M 294.00M 1.31B 1.24B 1.52B 1.15B 1.19B
Capital Expenditure Ratio - - - - - - - - - -

Very Strong Dividend History over the past 10 years

LNC has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests LNC is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 430.00M 430.00M 79.00M 42.00M 61.00M 91.00M 128.00M 170.00M 204.00M 238.00M
divided by
Shares Outstanding 273.91M 259.39M 285.64M 319.21M 314.95M 287.59M 275.15M 267.96M 254.94M 236.83M
Dividend Paid Per Share 1.57 1.66 0.28 0.13 0.19 0.32 0.47 0.63 0.80 1.00
Price at Year End 54.59 17.89 24.51 27.16 19.34 25.23 51.32 58.80 50.83 66.27
Dividend Yield 2.88% 9.27% 1.13% 0.48% 1.00% 1.25% 0.91% 1.08% 1.57% 1.52%

Strong History of Stock Buybacks over the past 10 years

LNC has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 273.91M 259.39M 285.64M 319.21M 314.95M 287.59M 275.15M 267.96M 254.94M 236.83M
Stock Bought Back - 5.60% -9.19% -10.52% 1.35% 9.51% 4.52% 2.68% 5.11% 7.65%
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