Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Lincoln National Corporation (NYSE: LNC) is a holding company, which operates multiple insurance and retirement businesses through subsidiary companies. Its segments include Life Insurance, Annuities, Group Protection, and Retirement Plan Services.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 2.45% in the last three months as well as by 59.43% in the last year.
• The stock is leaning towards the lower band of its 52-week range of USD 58.68 and 52-week low price of USD 18.50, with the current price near a decent support range of USD 18-USD 20, from where the price has taken a decent bounce.
• The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 55.58, indicating decent momentum in the current upward momentum.

1.2 The Key Positives, Negatives, and Investment summary

1.2 Key Metrics:

LNC was successful in generating USD 4.036 million free cash flows in FY22 which was comparatively higher than the FCF generated by the company in FY21. Furthermore, the company has been successful in managing its debts over the past year, which is evident from the graph given below.

1.4 Top 10 shareholders:

• The top 10 shareholders together form ~39.4% of the total shareholding, signifying diverse shareholding. The Vanguard Group, Inc., and State Street Global Advisors (US) are the biggest shareholders, holding the maximum stake in the company at ~13.39% and ~5.33%, respectively.

1.5 Consistent dividend payments with impressive dividend yield:

LNC (The Lincoln National Corporation) has a noteworthy dividend history characterized by its commitment to providing regular dividend payments to shareholders. The company-initiated dividend distributions in 1995 and has consistently increased its dividend payout over the years. LNC follows a quarterly dividend payment schedule, ensuring shareholders receive dividend income four times a year. The company has established a reputation for maintaining dividend stability, offering shareholders a reliable and consistent income stream. The dividend yield, which represents the annual dividend income relative to the stock price, may vary depending on market conditions and dividend payout levels. LNC's dividend policy is determined by its Board of Directors, who carefully consider various factors, including financial performance, earnings growth, cash flow, and capital requirements, when making dividend decisions.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY23:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 2.45% in the last three months as well as by 59.43% in the last year.
• The stock is leaning towards the lower band of its 52-week range of USD 58.68 and 52-week low price of USD 18.50, with the current price near a decent support range of USD 18-USD 20, from where the price has taken a decent bounce.
• The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 55.58, indicating decent momentum in the current upward momentum.

 

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 23, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.