Here's Why Investors Should Retain Lincoln National Stock for Now

Lincoln National Corporation LNC is a diversified life insurance and investment management company that provides a wide range of wealth accumulation, wealth protection, group protection and retirement products and solutions. The company operates multiple insurance businesses through four business segments: Annuities, Life Insurance, Group Protection and Retirement Plan Services. LNC has risen 9.1% in the year-to-date period, outperforming the industry average of 3.7%.

Headquartered in Radnor, PA, the company holds a market capitalization of $5.9 billion. The Annuities and Life Insurance segments form part of LNC’s Retail Solutions business, while Group Protection and Retirement Plan Services units make up the Workplace Solutions business. Price-to-book (P/B) is one of the multiples used for valuing insurance stocks. Its trailing 12-month P/B ratio of 0.82X is lower than the industry average of 2.02X.

Courtesy of solid prospects, LNC currently carries a Zacks Rank #3 (Hold).

Where Do Estimates for LNC Stand?

The Zacks Consensus Estimate for Lincoln National’s 2025 earnings is pegged at $7.11 per share, indicating a 0.6% year-over-year rise. In the past seven days, it has witnessed one upward estimate revision against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $18.7 billion for 2025. It beat earnings estimates in each of the past four quarters, with an average surprise of 10.7%.

LNC’s Growth Drivers

Lincoln National's revenues are poised for growth, driven by the strong performance of its Annuities and Group Protection segments. Its revenues are supported by higher insurance premiums and fee income. Its enhanced and diversified in-force book, improving average life insurance in-force and margin expansion initiatives, positions the bottom line well for growth.

LNC’s annuity business benefits from its wide range of products that cater to consumer preferences. In the first quarter of 2025, the segment’s total sales grew 33% year over year to $3.8 billion. It is making notable progress by evolving its annuity business toward a more balanced mix with a higher proportion of spread-based products.

Its Group Protection business continues to see improved growth and profitability trends. Income from operations improved 26% year over year in the first quarter of 2025. Prudent acquisitions in this segment and improving underwriting results will further drive its results. The segment’s operating margin improved 120 basis points in the last reported quarter.

Its new long-term strategic partnership with Bain Capital marks a significant step forward in advancing Lincoln National’s vision. This collaboration will provide unique access to private asset origination and speed up value creation across various streams. The company is reshaping its life product portfolio and enhancing the products and capabilities within its retirement business.

In the first quarter of 2025, LNC allocated $77 million toward dividend payout as part of its strategy to return value to its shareholders. Its quarterly dividends of 45 cents per share, resulting in a dividend yield of 5.2%, comfortably surpass the industry average of 3.2%.

Risks for LNC Stock

There are some factors, however, that investors should keep a careful eye on.

The company’s total expenses have escalated over the last several years due to increasing benefits expenses. Total costs increased 12.7% and 117.9% year over year in 2024 and the first quarter of 2025, respectively. With higher policies, benefit expenses might rise in the coming days, affecting the company's future margins. LNC’s benefit expenses rose 3.2% in the same quarter.

LNC carries a significant total debt, which amounted to $5.9 billion at the end of the first quarter of 2025. This leads to a total debt-to-capitalization of 41.7%, higher than the industry average of 14.5%.

Key Picks

Some better-ranked stocks in the broader finance space are MGIC Investment Corp MTG, Heritage Insurance Holdings Inc. HRTG and EverQuote Inc EVER, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MGIC Investment’s current-year earnings of $2.92 per share has witnessed one upward revision in the past 30 days against none in the opposite direction. MGIC Investment beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.9%. The consensus estimate for current-year revenues is pegged at $1.2 billion, implying 1.3% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $3.25 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 363.2%. The consensus estimate for current-year revenues is pegged at $854.9 million, calling for 4.6% year-over-year growth.

The Zacks Consensus Estimate for EverQuote’s current-year earnings is pegged at $1.18 per share, implying 34.1% year-over-year growth. EverQuote beat earnings estimates in each of the trailing four quarters, with the average surprise being 122.6%. The consensus mark for the current-year revenues is pegged at $644.1 million, calling for 28.8% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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