Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 15 Jun 2026
LGEN.L· Financial Services
Legal & General Group
Legal & General's low net margin of 1.4% and declining EPS raise serious concerns about its competitive positioning in the asset management sector.
Buffett fit
Weak fit
Owner
4
Durability
47
Management
65
Price
75
Score updated 5 Oct 2026 · analysis from 15 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
The cash the business earns for its owners, compared with the price of the whole company.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Legal & General, I would be concerned about the low net margin of 1.4% compared to the sector's top-quintile at 43.9%.
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The 10-year test looks grim given the declining EPS and low . A specific threat could be the increasing competition in the asset management space, which could further compress margins.
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Legal & General has a share count CAGR of -1.09%, indicating some commitment to or share consolidation.
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With an yield of 30.16%, the valuation appears attractive at first glance, but the of 25.2 suggests the market is pricing in growth that has not materialized.
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- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 yield of 30.16% suggests potential cash generation.
- 2Revenue of $42.04B indicates a substantial scale in the financial services sector.
- 3Consistent profitability over the last 5 years, despite negative EPS growth.
- 4Share count has been reduced by -1.09% over the last 5 years.
Concerns
5- 1Net margin of 1.4% is significantly below the sector's top-quintile cutoff of 43.9%.
- 2 of 10.15% is below the sector top-quintile cutoff of 10.4%.
- 3EPS has declined at a CAGR of -7.9% over the last 5 years.
- 4High debt/equity ratio of 2.15 raises concerns about financial stability.
Price history
$2.87+2.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Legal & General operates through multiple segments, including Institutional Retirement and Asset Management, generating $42.04B in revenue. However, its net income of $592M translates to a low net margin of 1.4%, indicating limited . The company’s earnings are primarily driven by insurance and retirement products, with a focus on long-term contracts.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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