Here’s Why You Should Own This Blue-chip Dividend Stock
Over the past two years, the investment world has moved from slow growth, low inflation and a low interest rate world to one characterized by high interest rates, a rapid growth and high inflation.
Inflation rates are the highest they have been in 40 years, with central banks around the world raising rates in an attempt to fight inflation.
Meanwhile, it appears that underinvestment in oil has caused significant supply problems, which could be prolonged. Thus, rising interest rates and the supply crisis should benefit value stocks, especially financials. Following this, Finbold has identified a blue chip dividend-paying stock that should be in your portfolio.
Lincoln National (NYSE:LNC)
Lincoln National (NYSE: LNC) is a highly rated insurance company, but also one that has missed out on its last income, leading to stock price volatility. Namely, the company had $4.69 billion in revenue, a 3.5% year-over-year (YoY) increase, representing a shortfall of $110 million. of dollars.
Similarly, earnings per share (EPS) was $1.66, representing a loss of $0.16, while $400 million was used to repurchase shares for the quarter. For the previous reporting period, the company showed solid growth through 2020 and 2021.
Finally, company management expects LNC to continue to grow at a compound annual growth rate (CAGR) of 13.7% and return to its historic fair value of nine times earnings.
If it goes as management presented, the company could deliver 200% total returns or 22% per year, taking into account the dividend yield, which currently stands at 2.51%, and if it increases in parallel.
Stocks year-to-date (YTD) are down more than 21% and were quite volatile in May. Right now, stocks are above the 20-day simple moving averages (SMA) but may need to break above the $58 level to continue moving higher.
Higher than usual volumes were noted throughout May and June, perhaps indicating that more volatility is ahead.
Meanwhile, on Wall Street, analysts are pricing the stock as a moderate buy, predicting the average price over the next 12 months will hit $67.90. This potential increase would mean that stocks should 24.84% increase from the current trading level of $54.39.
Investors worried about recent volatility could take advantage of the company’s $0.45 quarterly dividend as they wait for the market to stabilize on LNC’s stock price. Meanwhile, the company looks poised to grow as it has in previous years, despite the more recent shortfall.
Long-term investors and income investors should keep an eye on this stock as the current volatility could provide them with a solid entry point into this blue-chip, dividend-paying stock.
Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.