Legal and general shares jump 8%as investors celebrate the repurchase and dividend Bonanza!

Legal and general (Lgen) Shares have risen 8.25%as I write this Friday (7 February) and I couldn’t be happier. I’ve been waiting for a while at this moment. In fact, I dug in for a much longer wait, so this is an early bonus.

At first I thought FTSE 100 Insurance company and asset manager had published a bumper set with full -year results, but these do not land until March 12.

Instead, we got a blockbuster message: Legal & General sells its US protective company to the Japanese mutual insurance company Meiji Yasuda for $ 2.3 billion. In return, Meiji Yasuda will take a 5% share in L&G.

Legal and General CEO António Simões called it a “Transformative transaction” It brings both strategic and economic benefits.

It’s the top of FTSE 100 Leader Board!

It is definitely transformed into the legal and general stock price. It has been sluggish for years and fell 5% over 12 months and 25% over five years. It is despite a well -received update in December that outlines £ 5 billion. To £ 6 billion In Solvency II Capital General between 2025 and 2027.

Back then I wrote it “I love my legal and general shares even more after today’s exciting update”. Now my devotion is reciprocated.

FTSE 100 Financials have struggled with volatility in the stock market, British financial concerns and high interest rates. The latter made cash and bonds more attractive, but investment is cyclic and that is changing.

With the Bank of England, the rates cut three times since August, and with more likely cash and bond rates fall. In contrast, Legal & General’s dividend yield is still on a staggering 7.8%.

I have reinvested any yield and built my rod more of the recovery. The happy day seems to be coming closer.

According to today’s agreement, Meiji Yasuda Legal & General’s US protective business takes over and gets a 20% share in its US Pension Risk Transfer (PRT) unit. Legal & General keeps 80% through reinsurance schemes.

Legal and general plans to spend £ 400 million. To finance US PRT -Genitial Insurance and – Drum Roller – Pump a Chunky £ 1 billion To a new repurchase program. There dwarves the recent £ 200m. The rest of the proceeds are reinvested in the company, which hopefully drives further growth.

I get income as well as growth

Between 2025 and 2027, Legal & General expects to return about 40% of its market capital via dividends and repurchases. Given today’s hood of £ 15 billion, it’s £ 6 billion This should also facilitate the concerns of yield sustainability. High yields often signalize problems, but that doesn’t seem to be the case here.

An adhesive point is valuation. The stock looks surprising animals and deals with 32 times earnings. In August, Legal & General reported a 40% fall in six months after tax to £ 220m. Core operating profit only £ 5 million. To £ 849 million It is not yet shooting on all cylinders. Maybe it will never.

Legal & General operates in a mature, competitive market at a difficult time for the global economy. Donald Trump’s threats of trading barifers and a potential British recession risks adding uncertainty. Buying today risks surplus makers jumping.

I still see the long -term case strengthening. I bought L&G three times in 2023. My shares have risen only 12.5% ​​since then (most of it today), but my total return, including dividends, is closer to 25%.

No guarantees, of course. But if Legal & General delivers its promises, today’s rally could be just the start.