Lincoln National Corporation (NYSE:LNC) — This life and health insurance company offers annuities, life, group life and a broad range of other insurance products in addition to comprehensive financial planning and advisory services.
Like other insurance companies, Lincoln National should benefit from short-term interest rate increases by the Federal Reserve. However, LNC has made strides in improving its balance sheet strength and is considered one of the best-managed insurance companies in the U.S.
Last Thursday, S&P Capital IQ raised its 12-month target for LNC stock by $6 to $60 per share, and its 2017 EPS estimate to $6.85 per share from $6.75. It initiated an EPS estimate for 2018 of $7.25. A recent Q3 2016 operating EPS of $1.89 topped S&P’s estimate of $1.60, thus it increased this year’s EPS estimate by 30 cents to $6.34.
LNC currently pays a dividend of $1.16, providing an annual yield of 2.32% at a stock price of $50.
Lincoln National has been in a bull market since early this year when, in February, it reversed from a short-term correction. In June, LNC stock penetrated its 200-day moving average and a round of profit-taking in late June evolved into a cup of a bullish cup-and-handle formation and a golden cross. It broke from that formation, as well as a right triangle in late September, and formed a rectangle from Oct. 1 until last week when a breakaway gap from about $49 to $50 confirmed its trading target of $58.
Gaps are sometimes partially closed, and so try to buy LNC stock at $50 for an $8 trade and a projected return of 16%.