What needs to happen for investors to show us some love? Legal and General Group (LSE: LGEN) shares?

The stock is trading near post-pandemic lows and currently has a 10% dividend yield, one of the highest in the UK market. City analysts also do not expect the payout to be cut.

Indeed, the half-year results published on 7 August included a further 5 per cent augment in the half-year dividend, in line with previous forecasts by up-to-date CEO António Simões.

One problem may be that Mr Simões has huge shoes to fill. I suspect the market is not yet entirely sure whether he will be able to maintain the long-term growth record of his predecessor, Sir Nigel Wilson.

Mr Simões’ decision to combine the two parts of L&G’s asset management business into one entity is also not without risk – they are completely different businesses.

Why am I on board

Investing in shares always involves some risk. But as a long-term shareholder, I am content to trust that Legal & General’s proven culture and 188-year history will continue to provide the reliable continuity I seek.

I’m also (mostly) encouraged by this week’s results. The group’s half-year underlying operating profit – a key metric – rose slightly to £849m.

L&G’s return on equity rose to 35.4%, from 28.6% a year earlier. Return on equity is an significant measure of profitability for financial companies.

While there is no guarantee that the dividend will remain secure, I was pleased to see a cash surplus of £731m generated in the first half of the year, similar to last year’s £752m. This is equivalent to around 12p per share – enough to cover twice the interim dividend of 6p.

Pensions slowdown?

Much of Legal & General’s growth in recent years has been driven by wholesale annuity deals, where the firm takes responsibility for final salary pension schemes from employers.

The first half of this year saw a pointed slowdown in deals, with Legal & General closing £1.5bn of business across 15 deals, compared with £5bn and 20 deals during the same period last year.

This may seem alarming, but I think it’s fair to say that these huge transactions can be quite lumpy. They don’t come in a steady flow.

Management continues to believe in the growth prospects for the endowment segment and says that the value of written or exclusive contracts this year will be as much as £5 billion, with the UK targeting over £24 billion.

There is also potential for greater growth in the US in the longer term as the business continues to expand. Legal & General is one of the few UK asset managers with the scale of its larger US rivals.

What would I do now?

Legal & General is already one of the larger holdings in my income portfolio. While I would happily buy at this level, I don’t want my exposure to any one company to become too unbalanced.

However, if the company continues to seem budget-friendly to me and its results are in line with expectations, I may add more shares to my portfolio this year.