I’ve been perusing the FTSE 100 and FTSE 250, and with a share price of 252.2p, Authorized & Common (LSE: LGEN) stands out to me.

Each indexes have rallied this yr, nonetheless, it looks as if the asset administration stalwart has missed out on these features. 12 months thus far, it has risen simply 1.5%.

However I don’t view that as a problem. In truth, I see it as a chance to snap up some undervalued shares. If I didn’t already personal a few of its shares, I’d rush to purchase them. I feel traders ought to contemplate shopping for the inventory as we speak.

Valuation

There are a number of the reason why I’m bullish on Authorized & Common as we speak. One is its valuation. There are a number of methods I can measure this, however I wish to give attention to its price-to-earnings (P/E) ratio.

Its ahead P/E is 9.8. That’s under its long-term historic common of round 15 in addition to the Footsie common of 11. That indicators to me that there’s worth within the inventory as we speak.

Passive earnings

Alongside its low cost valuation, there’s additionally one other large draw: its 8.1% dividend yield. That’s approach above the common of its Footsie friends (3.9%). What’s additionally spectacular is that within the final decade, its payout has risen by over 80%.

What I wish to see is that the enterprise has dedicated to returning extra worth to shareholders recently. We’ve seen this with its cumulative dividend plan, which involves an finish this yr.

Administration intends to develop the yield by 5% for the present yr. That places its ahead yield at a whopping 8.7%.

My kind of purchase

After I’m researching which shares so as to add to my portfolio, there are particular standards I search for.

The primary is a monitor file of a rising dividend, which Authorized & Common clearly has. The subsequent is a robust stability sheet. With a Solvency II ratio of 224% for 2023, an 8% soar from 2022, Authorized & Common additionally ticks that field.

A robust stability sheet permits it to give attention to investing for future development. As such, analysts predict the agency to develop earnings at a charge of twenty-two.9% a yr to the tip of 2026.

The dangers

That mentioned, the enterprise has confronted a number of points in the previous few years as a result of present financial atmosphere.

Raging inflation and elevated rates of interest, and the uncertainty they’ve sparked, have seen the Authorized & Common share price undergo at instances over the previous couple of years.

In latest instances, working revenue has taken successful. On high of that, the enterprise has seen its belongings below administration wobble as traders pull their cash from funds. We’re not out of the woods but, so I’d count on additional volatility going ahead.

A steal?

However at its present price, I feel Authorized & Common may very well be a shrewd purchase for long-term traders and it seems to be like among the best bargains on the FTSE, for my part.

Whereas I’d count on some extra instability this yr and subsequent, I feel in the long term the inventory has loads of rising room to return good-looking features to shareholders.

I’ll be holding on to my shares and with the passive earnings I obtain from its meaty yield, I’ll merely reinvest it again into shopping for extra undervalued shares.