We recently published a list of 11 Ridiculously Cheap Stocks to Invest in. In this article, we are going to take a look at where Lincoln National Corporation (NYSE:LNC) stands against other ridiculously cheap stocks to invest in.
Just as we hunt for bargains in the commodity market—comparing relative prices, identifying discounted products, and getting the product most valued for our money—investing in the financial market isn’t any different. In both investments, price matters.
In a world of overpriced stocks, spotting the hidden gem is what differentiates a smart investor from an impulsive investor. One who realizes that value isn’t just about what you buy rather it’s more about what you pay, is the one who is likely to identify an overlooked but full of value stock.
Let’s first understand what a cheap stock actually implies. There are two most common interpretations of such a stock. First, a stock may be regarded as a cheap stock if it has a low share price. Second, an undervalued stock is more commonly known as a cheap stock. Our analysis resonates with the second interpretation, that a cheap stock is a stock that is trading below its intrinsic value based on factors like earnings, revenue, or assets. Thus, in the market, investors say it’s “cheap” relative to its true potential, making it a compelling investment.
One such measure to spot a cheap stock is through the forward price-to-earnings ratio. This is a measure used by investors to actually see how much they are paying for each dollar of a company’s earnings. A low P/E can signal an undervalued stock when compared to its competitors, historical average, and broader market average.
A report by Hoover Capital Management (HCM) analyzes the historical performance of value versus growth stocks through the French High Minus Low (HML) factor. The results from 97 years of data, from July 1926 to December 2023, strongly support value investing. The cumulative return of value stocks surpassed growth stocks by an impressive 3,000%. In other words, value investing has delivered a 30 times higher return on growth than growth investing. It can be further reinforced through the research by Economist Victoria Galsband, according to which cheap stocks outperformed growth stocks from 1975 to 2010 in every single G7 country, including Canada, the U.S., Japan, and the leading European countries.
Another report that analyzed the impact of additions or removals of companies from the S&P index on their valuations indicated that, as removals are associated with the undervaluation of the stock and vice versa, many companies removed from the index outperformed the market. A study by Research Affiliates highlighted that stocks taken out of the S&P between 1990 and 2022 outperformed those that were added by more than 5% annually. This provides a compelling case for our view that undervalued stocks, translated to cheap stocks, have a greater probability of yielding higher returns.
Our Methodology
We have compiled a list of 11 ridiculously cheap stocks through the Finviz screener. In doing so, stocks have been selected that have a lower than 5 price-to-earnings (P/E) ratio. These stocks cover a range of industries, from consumer products to natural resources exploration. These companies are then listed according to their P/E ratios, from highest to lowest.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Lincoln National Corporation (NYSE:LNC)
Forward P/E as of April 17: 4.17
Lincoln National Corporation (NYSE:LNC) is a financial holding company operating various insurance and retirement businesses through its subsidiaries. The key segments of this Fortune 200 American company include Annuities, Life Insurance, Group Protection, and Retirement Plan Services. From businesses to individuals, the products and services are offered across the United States and the UK. Headquartered in Radnor, the company is known for its integrity, forward-thinking, and optimism.
Lincoln National Corporation (NYSE:LNC) is one of those enterprises gaining traction due to its strategic partnerships. Just recently, the company announced entering a partnership with Bain Capital, a top global investment firm, allowing LNC to expedite its strategy, identify value creation opportunities, and deliver growth capital in the areas of strategic focus. This 9.9% ownership stake in LNC will make Bain Capital a strategic asset management partner across a range of asset classes.
The giant is also collaborating with Partners Group, a leading private markets firm, for an evergreen fund to invest in the globally varied cross-sector private markets royalty portfolio. Using a relative value approach, Partners Group will invest in high-potential sectors like pharmaceuticals and entertainment, among other emerging high-growth industries, including energy and sports.
The strategic activeness of Lincoln National Corporation (NYSE:LNC) reflects strong growth and profitability, stemming from operational efficiency, market footing, and a solid customer base. Our bullish thesis is mainly based on the diversification of the business’s investment portfolio. A perfect blend of debt securities, particularly government-backed, fixed-interest, and inflation-linked, is what it is.
While life insurance premiums are anticipated to increase 1.5% year-over-year in developed countries, the greatest potential lies in the developing economies this 2025. Among these are China, India, and Latin America, with premiums expected to rise by at least 5%. Thus, in this moderately growing market, Lincoln National Corporation (NYSE:LNC) is one of the best cheap stocks with huge upside potential.
Overall, LNC ranks 8th on our list of ridiculously cheap stocks to invest in. While we acknowledge the potential of cheap stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LNC but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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