US Edition Legal & General
119.4p -4.4p
Questor says Buy
Since then, the group has simplified its structure and has focused on generating cash by moving away from capital-intensive products such as unit-linked bonds and reducing the commission payments it makes to intermediaries.
This has, excuse the pun, paid dividends, generating £600m of fresh capital enabling the life insurer to lift its full-year dividend payment to shareholders by 24pc in 2010.
Tim Breedon, chief executive, hopes to generate a further £700m in cash in 2011, a policy likely to underwrite further increases in shareholder payouts.
The omens already look good after the company posted total sales of £433m during the first quarter of the year, up 12pc on the same period in 2009.
In September 2009, Questor advised investors to steer clear of L&G until better times.
However, the company's shares have since more than doubled in price and speculation linking it as a takeover target for Clive Cowdery's Resolution is now a thing of the past, making the insurer an attractive investment.
L&G's shares currently yield 4.2pc, a figure which is expected to improve to 6.1pc by 2014. Meanwhile, the price-to-earnings ratio is currently 8.9, although this is expected to fall to 7.9 during the same period. The company also boasts an influential fund management arm, which saw assets under management grow to £354bn in 2010.
In recent months, Questor has been an advocate of the insurance industry, which it believes offers great opportunities for investors.
Although the industry is still dogged by uncertainty over Solvency II measures (the new European capital rules for insurers) - Mr Breedon has said he is "reasonably confident" they will not place an unnecessary burden on the industry. As chairman of the Association of British Insurers, the man who once described them as a potential "betrayal of savers" is well placed to ensure this does not happen.
Buy.