Investors aren’t totally convinced by Legal & General (LSE: LGEN) shares. I hold this FTSE 100 insurer and asset manager, and I’m not completely convinced either. From time to time, I’ve even been tempted to sell. So far, I’ve clung on. Is that loyalty justified, or am I simply refusing to admit I’ve backed the wrong horse?

There’s one thing investors will be happy with: income. Legal & General has one of the highest yields on the FTSE 100, currently 7.15% on a trailing basis. Reinvesting that income could double an investment in roughly 10 years, even if the shares go nowhere. If they rise, so much the better.

The board plans to increase dividends by 2% a year, giving forecast yields of 7.29% in 2026 and 7.44% in 2027. That’s generous, but those increases are below inflation, meaning the real value of the income will gradually shrink.

Frustrating FTSE 100 stock

The real frustration is the share price. Legal & General has spent the past dozen years going nowhere. It’s a complicated business and questions over the quality of earnings have all weighed on sentiment.

Asset management profits were broadly flat in 2025, while its Solvency II coverage ratio fell from 232% to 210%, partly reflecting asset revaluations and shareholder returns.

Yet the business is improving. Core operating profit rose 6% in 2025 to £1.62bn, with core earnings per share (EPS) up 9%. In the first half of 2026, operating profit grew another 7% and EPS climbed 11%.

The shares have responded, climbing 28% over the past year. Add the dividend and the total return is closer to 35%.

It can’t keep up with Aviva

Right now, Legal & General looks good value on a forward price-to-earnings ratio of around 7.85. So why aren’t investors piling in?

One reason is that FTSE 100 rival Aviva has been showing everyone how it’s done. Aviva’s operating profit jumped 25% in 2025, then rose another 24% in the first half of 2026 to £1.33bn. Legal & General’s making progress, but hasn’t matched this momentum.

It has opportunities though. Its pension risk transfer business wrote £11.8bn of business in 2025. Its £1.2trn asset management operation has scope to grow, particularly in private markets and workplace pensions.

But competition’s fierce, and it won’t escape unscathed if the AI bubble bursts, as a stock market crash could reduce assets under management, hitting fees and investor confidence. Legal & General needs to improve its asset management performance, and that won’t help.

Buy, Sell or Hold?

One or two of my colleages at The Twelfth Magpie are considering offloading their Legal & General shares. I won’t be joining them.

I’ve done far better out of two other FTSE 100 financial income stocks, M&G and Standard Life. Things go in cycles. Perhaps they’ve done a little too well, while Legal & General’s done a little too poorly.

I think the shares are worth considering, primarily for income-focused investors. With luck, one day we might get some growth too. For dividend lovers, here’s another 7%-yielding FTSE 100 stock that’s well worth checking out…

What income stock do we like better than Legal & General Group Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Harvey Jones owns shares in Legal & General, M&G and Standard Life.