£10,000 invested in Legal & General shares at the start of 2025 is now eligible…

Legal & General (LSE: LGEN) shares are finally on the rise. Always FTSE 100-The focused investor knows that the insurance and asset manager offers a good dividend yield, but growth has been scarce. Now it’s starting to show.

Could this be the year Legal & General’s share price finally delivers?

I have the interest I have, because I hold the stock in my Self-Invested Personal Pension (SIPP). I like it when the annual dividend goes to my SIPP, but the shares are held in two other high yielding FTSE 100 funds that I own, IM&G again Phoenix Group Holdings share price.

Just last year, I checked analyst forecasts for Legal & General and found that vendors were predicting 12-month volume growth of 15%. Combined with a forecast yield of 9.5%, it meant that Legal & General could deliver a total return of around 25%.

FTSE 100 revenue champion

I was wary, surprised by the harvest but wary of what I called it “Wafer-thin dividend coverage of 1.1 times earnings”. However with the board expecting to generate an additional £5bn-£6bn by 2027, I decided the stock was worth considering.

In retrospect, the salespeople were incredibly knowledgeable. Shares of Legal & General are up 15.94% over the past year. Throw in a trailing yield of 8.04% and the total return comes to 23.98%, turning £10,000 into £12,398. Not bad, though not stellar. The FTSE 100 as a whole grew by 21.5% last year. Following the 3.2% yield on the upside, it is slightly ahead.

Also, shares in Legal & General were well behind M&G and Phoenix, both up 45%. It remains a booming sector. How?

The company’s earnings and revenue have been struggling recently, with earnings per share (EPS) up three years in a row, as my table shows.

Results for the full year 2024, published in March, were not all bad. They showed a 6% rise in core operating profit to £1.6bn. Investors also received £500m from the share sale. Pension risk transfers brought in £10.7bn, while the Solvency II ratio stood firm at 232%.

High dividend yield

There was better news in October, when the board said it expects EPS to grow in the full year 2025, and at the high end of its target of 6%-9%. The current price-to-earnings ratio is a ridiculously high 91, but as incomes rise that is predicted to drop to 10.9 by 2026. The climate yield is an impressive 8.37%.

There are always risks. A broader market crash will affect Legal & General, as any profits could be missed. But as stocks grow, I remain optimistic. I even check consumer forecasts for the coming year. They produce a one year price tag of around 265p. That’s probably where the stock stands today.

I was hoping for more. It doesn’t matter. Dividends like these are for the long term. I still think Legal & General sharing should be considered at this point. The real gain should come from holding for years, allowing gains to compound while treating any share price growth as a welcome bonus.