Markets
LNC

Why Lincoln National Stock Lost 19% in August

What happened

Lincoln National (NYSE: LNC) stock trailed the market last month when it shed 19% compared to a 2% decline in the S&P 500 index, according to S&P Global Market Intelligence. The drop sent shares close to the break-even point for the year, before the stock rebounded slightly in early September.

A man signs a check.

Image source: Getty Images.

So what

August's slump came as investors processed the insurance and financial services giant's second-quarter earnings report, released on the last day of July. That announcement showed broad-based growth, with each of Lincoln's four business segments contributing to a 10% overall revenue increase. Key efficiency metrics, including return on equity and operating earnings, rose as well.

Still, investors chose to focus on the potential for lower interest rates and an economic slowdown, hurting Lincoln's earnings strength in the quarters to come, as they did with other bank stocks last month.

Now what

CEO Dennis Glass and his team can't predict when the next recession might hit, but they expressed confidence that Lincoln is positioned well to handle a wide range of borrowing environments, including a return to historically low interest rates. "We regularly stress test equity markets, interest rates, and credit scenarios and are comfortable with our ability to handle significant stressors," he told investors in early August.

10 stocks we like better than Lincoln National
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Lincoln National wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 1, 2019

 

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

LNC

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More