$LGEN (-1,07%) v $AV. (+2,01%)

💡 Core Investment Thesis

• Legal & General: Deep-value income play with 9.1% dividend yield, leveraging global pensions and private markets. Trading below fair value but facing restructuring execution risks.
• Aviva: Growth-focused insurer with 7.3% yield + 12% profit growth target, capitalising on UK wealth consolidation and efficiency gains. Higher operational momentum but vulnerable to UK policy shifts.

📊 Business Models & Strategy

Legal & General

• Global Footprint: UK, US, Europe, Asia exposure
• Core Segments: Institutional pensions (£1.2tn AUM), private markets expansion
• Restructuring: Early-stage transformation under new CEO
• Key Advantage: Diversification hedges UK volatility

Aviva

• Focused Markets: UK, Ireland, Canada dominance
• Core Segments: General insurance, wealth management (£200bn AUM)
• Strategic Wins: Direct Line acquisition (£500m synergy potential)
• Key Advantage: Streamlined ops post-£1.8bn cost cuts

💰 Financial Performance

Legal & General

• Revenue: £11.97bn (2024, flat YoY)
• Profit: Stagnant; cost-cutting underway
• Valuation: P/E 10.5×, 3.6% below AI fair value
• Dividend: 9.1% yield (21.3p) with 95% payout ratio

Aviva

• Revenue: £12.2bn (2024, +12% YoY)
• Profit: £1.77bn (+20% YoY), targeting £2bn by 2026
• Valuation: P/E 10.4×, slightly "rich" vs macro conditions
• Dividend: 7.3% yield (34.7p) with 75% payout ratio

🌍 Growth Catalysts & Risks

Shared Opportunities

• Ageing populations driving retirement demand
• UK Solvency II reforms (potential capital flexibility)

Legal & General Headwinds

• Low dividend coverage (95% payout)
• Execution risk in global restructuring

Aviva Headwinds

• Interest rate sensitivity (NIM: 1.59%)
• Integration risks from Direct Line acquisition

⚠️ Key Risks

• UK Policy Volatility: Post-election regulatory uncertainty
• Rate Sensitivity: BoE cuts compressing margins
• Company-Specific:
• L&G: Pension risk transfer slowdown
• Aviva: Wealth platform competition

🎯 Investment Recommendations

Choose Legal & General For

• Income Priority: 9.1% yield with global diversification
• Value Focus: Margin of safety at <240p entry
• Risk Tolerance: Accepting restructuring uncertainty

Choose Aviva For

• Growth + Income: 7.3% yield with double-digit profit growth
• Operational Efficiency: Post-restructuring momentum
• Entry Strategy: Below 580p (8%+ forward yield)

Total Return Scenarios (12 Months)

• Base Case:
• L&G: 15% (9% price + 6% dividend)
• Aviva: 18% (10% price + 8% dividend)
• Bull Case:
• L&G: 25% (rate cuts + buyback)
• Aviva: 30% (acquisition synergies)
• Bear Case:
• L&G: -10% (UK recession)
• Aviva: -8% (integration failures)

⚖️ Bottom Line

L&G delivers superior immediate income with global stability, while Aviva offers stronger growth prospects through UK consolidation. Blend both for balanced exposure: L&G for yield resilience, Aviva for capital appreciation.

Tactical Watch: Monitor Aviva’s Direct Line integration (H2 2025) and L&G’s restructuring milestones for entry opportunities.

Can L&G sustain its 9.1% yield with 95% payout?

Will Aviva’s wealth platform offset interest rate risks?

How exposed are your holdings to UK policy shifts?

Disclaimer: Not financial advice. Conduct independent due diligence.

Added more $LGEN (-1,07%) - Why I love this stock?

1️⃣ Long-term growth potential: With a solid track record and focus on retirement solutions, it's built for the future.

2️⃣ Core equity for diversification: A stable, reliable addition to balance out riskier plays.

3️⃣ High dividend yield: At over 7% in 2024, the passive income is too good to ignore—especially when reinvested tax-free in my UK ISA.

The next Ex-Div date is 24 April 2025 - payment will be 5 June

Building a diverse, income-generating portfolio one stock at a time.

What are your thoughts on $LGEN for the long haul? 💬

This is a very long term investment 20 years +

Big sell off in LGEN due to exposure to £250m worth of Russian bonds. This is worth less than 0.1% of LGEN portfolio. Revenue for year is £16bn +. Thanks for the cheap shares!