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Lincoln National Touches 52-Week High on Favorable Developments

Zacks Equity Research

On Jul 3, 2014, shares of Lincoln National Corporation (LNC) reached a new 52-week high of $53.77, after a series of positive tidings for the company.

The stock gained 45.9% in the one-year period. Moreover, Lincoln National’s one-year return of 36.68% was higher than the S&P 500’s return of 24.67% and that of the other industry players like AEGON N.V. (AEG), MetLife, Inc. (MET) and National Western Life Insurance Company (NWLI) that recorded returns of 34.82%, 27.03% and 34.64% respectively.

Since the beginning of the year, Lincoln National has made significant investments to upgrade its services and boost investors’ returns. These are also driving the bullish sentiment on the stock.

Lincoln National launched products like AdviceNextSM in Jan 2014 and MoneyGuard® II in Mar 2014. While the first optimizes the provision of resources, tools and technology to the company’s advisors so as to generate sales growth, the second product is a long-term care (LTC) funding solution designed to increase policy benefits and flexibility of premiums.

On the other hand, another product, Presidential® Managed Risk Moderate Fund introduced in Apr 2014, was designed to protect investors at times of market volatility. Additionally, Lincoln National launched a car accident coverage – Lincoln Motor Vehicle Accident Rider – in Apr 2014, which enhances the company’s Accident Insurance portfolio.

The company’s efforts to improve services were further evident from the expansion of its dental network in Apr 2014 to include 274,000 provider locations in the country. Moreover, the company upgraded its service by launching Lincoln LifeReserve® Indexed UL (:IUL) Accumulator life insurance offering in May 2014.

To return more value to its shareholders, Lincoln National increased its share repurchase program in May 2014, bringing the total authorization to $1 billion. This is in line with consistent quarterly dividend payouts, which was increased by 33% to 16 cents per share in Oct 2013. Efficient capital deployments reflect the company’s robust financial position and commitment to shareholders.

Earlier, the company reported first-quarter 2014 earnings that surpassed the Zacks Consensus Estimate by 3.88%. Notably, this Zacks Rank #2 (Buy) life insurer delivered positive earnings surprises in all of the last four quarters with an average beat of 8.16%. This further brightens the outlook for the coming quarters.

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