Here's Why Lincoln National Can Be a Smart Addition to Your Portfolio

Lincoln National (LNC) has significantly outperformed peers, with its stock up 29.4% year-to-date, driven by strong first-half 2025 results including a 17.2% increase in annuity sales and a 30.5% rise in Group Protection income. The company maintains a solid financial position with $7.1 billion in cash as of June 2025 and offers a 4.4% dividend yield. Analysts forecast continued growth, with a 5.8% projected increase in 2025 earnings per share and a Zacks Rank #2 (Buy).

Analysis

Lincoln National (LNC) is demonstrating significant fundamental strength and market outperformance, with its stock appreciating 29.4% year-to-date, far exceeding the 1.2% industry average. This performance is underpinned by robust operational results in the first half of 2025, highlighted by a 17.2% year-over-year growth in annuity sales to $7.8 billion and a 30.5% increase in income from its Group Protection business, which also saw its operating margin expand by 180 basis points. The company's financial position has been fortified, with cash and invested cash rising 23.1% from year-end 2024 to $7.1 billion as of June 30, 2025. From a valuation perspective, LNC trades at a trailing price-to-book ratio of 0.91x, a significant discount to the industry average of 1.93x. This is complemented by an attractive 4.4% dividend yield. The forward-looking outlook is supported by a Zacks Rank #2 (Buy) and a consensus earnings estimate indicating 5.8% year-over-year growth for 2025, reinforced by a history of beating earnings expectations by an average of 15.7% over the past four quarters.

Key Decisions for Investors

• Given the combination of strong operational momentum, a history of positive earnings surprises, and a price-to-book ratio of 0.91x that is less than half the industry average, the stock presents a compelling case for potential undervaluation despite its recent 29.4% YTD rally.
• Income-oriented investors should consider the 4.4% dividend yield, which appears well-supported by a strengthening balance sheet that includes a 23.1% increase in cash reserves.
• Investors should monitor the continued performance of the Annuities and Group Protection segments, as their sustained growth and margin expansion are critical to validating the current bullish thesis and justifying further upside.