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Legal & General (LSE:LGEN) has limited exposure to the Middle East, but this has not stopped its shares from falling.
This past month, the FTSE 100 the share fell by 7.2%. It means that a £5,000 investment made on 1 March will now be worth £4,640, a drop of £360.
Does this represent a good dip buying opportunity? I think it’s possible, although it seems retail investors aren’t sure. While Legal & General is the fourth most traded stock by AJ Bell customers last week, and is the seventh-best seller.
The growing risk…
As I say, Legal & General sources are only part of the overall profit from the Middle East. It has a low-level asset management division that works with sovereign wealth funds, pension funds and major banks.
Yet like the broader stock market, it is still sinking in value because of the Iran conflict. The impact of global inflation and interest rates could be significant. War may also cause significant problems for economic growth.
In Legal & General, this can have far-reaching consequences for the entire business. Demand for its life insurance, annuity and investment annuities may decline as consumers feel less. Falling financial markets will also drag their assets under management and fees.
The financial services giant has remained strong so far. Core operating profit increased by 6% in 2025 due to strong pension, protection and wealth products. Could Iran’s war play a major role in operations?
… but long-term energy
It is possible. But it doesn’t mean investors should avoid Legal & General stocks like the plague. If you’re a long-term investor, I think it’s still a compelling stock to consider.
Make no mistake: FTSE firm structure opportunities remain strong. The world’s population is growing rapidly, and people’s interest in financial planning (especially in Western countries) is growing. It’s a combination that I feel could greatly increase demand for retirement and financial products.
Legal & General is moving into high-growth areas such as asset management and multi-funding by 2028, aiming to underwrite up to £65bn of the UK’s pension risk transfer (PRT) business. The company is also expanding its global reach by partnering with other industry leaders to maximize long-term earnings.
annual yield of 9.1%.
After its most recent dividend, Legal & General paid a dividend of 9.1%. And with a cash-rich balance sheet, the company is in a great position to meet analysts’ payout estimates, even if earnings disappoint in 2026. Its Solvency II capital ratio remains more than double the regulatory average.
Meanwhile, the forward price-to-earnings (P/E) ratio remains at 8.1 times, below the 10-year average of 10-11. Given the company’s huge (and growing) market potential, and the work it’s doing to achieve it, I find this valuation very attractive.
Although not a risk, I think Legal & General stocks are worth considering. But it’s not the only stock worth looking at.
