Legal & General has huge revenue potential with a forecast profit of almost 10% by 2025!

I FTSE 100It’s like a candy store for cash-strapped investors, with dozens of stocks to choose from.

Today, the blue-chip index yields an average of 3.68%, with any share price growth higher. I can easily beat that by targeting high income stocks like asset managers and insurers Legal and General Group (LSE: LGEN).

The recent stock market dip has reduced Legal & General’s share price, making it look like a bargain, while driving its yield to nosebleeds.

The stock currently has a price-to-earnings ratio of 12.8. Its P/E forecast for 2025 is only 9.74 times. Seems like good value to me.

The stock hasn’t done too well lately

Even as a fan, I have to admit that Legal & General shares are disappointing. They have dipped 9% in the past 12 months, and 27% in five years.

Much of that is down to forces beyond its control, such as pandemics, energy shocks and the cost of living crisis. The group has £1.2trn of assets under management, so it is vulnerable to stock market volatility.

So what about these things over which he has some authority? First-half results published on 7 August showed core operating profit rose from £844m to £849m, but profit after tax fell from £377m to £223m.

Its update on Dec. 4 maintained full-year profit guidance and teased investors with hopes of buying the stock in 2025. But for me, it’s an important benefit.

The next yield is 9.54%. By 2025, that is predicted to reach 9.78%. As a rule, double-digit yields are at risk. However this appears to be sustainable as the board expects to generate Solvency II capital of £5bn to £6bn from 2025 to 2027.

My concern​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ has is has has has has has has has has has has has has has has has has has has has has is has has has has to is has a is is is is issss to do with the income, it´s yield is only 0.9 times. I’m always optimistic though. The board increased 2024 dividends per share by 5%, and forecasts growth of 2% “after that”. Without being shocked, I hope this passes.

I look forward to those benefits

I personally own 1,980 shares in Legal & General. With dividends per share forecast to reach 21.8p by 2025, I expect to receive £431 worth of dividends over the next 12 months. Reinvested at today’s price of 2.21p, that would buy me another 195 shares.

So I’m still going to build my long-term wealth even if the stock price doesn’t rise in the next year. So what do the experts say? The 15 analysts providing one-year forecasts have produced an average target of 263.7p. If correct, that’s an 18.6% increase from today. Combined with that yield, I’d be looking at a total return north of 28%.

Obviously, a lot can go wrong. Continued high interest rates will weigh on stocks, as investors can get higher yields on stocks and bonds without putting their money at risk. The UK economy looks to be in dire straits, and heaven knows what President-elect Donald Trump will bring.

However from a long-term perspective I expect Legal & General shares to reward my faith in them, starting with that big 2025 yield.