At 231p, the Legal & General (LSE: LGEN) share price looks like it has the potential to be one of the FTSE 100’s greatest bargains. But is that really the case?

Unlike the Footsie, the stock hasn’t had the greatest start to 2024. Year to date, it’s down 7.1%. It’s posted a slightly better performance over the last 12 months, but is still down 3.9%.

But does that mean there’s plenty of value left to squeeze out of the stock today? Let’s take a closer look.

Valuation

There are a few ways I can measure this. One is by looking at its price-to-earnings (P/E) ratio. Legal & General’s P/E is 33.2. As the chart below shows, that looks expensive compared to its peers Aviva, M&G, and AIG. It’s also considerably above the FTSE 100 average of 11.

Created with TradingView

That said, it looks like better value when looking at its forward P/E. This compares the stock’s price to its predicted earnings.

That comes in at just 9.8, which is below the Footsie average. It’s also cheaper than two of its largest rivals Aviva (11.5) and AIG (10.5) and below Legal & General’s historical average of 15.

Dividend yield

One area where Legal & General excels is its dividend yield. As the chart below portrays, it currently clocks in just shy of 8.9%. That’s way above the Footsie average (3.6%). It’s also higher than its peers, except for M&G.

Created with TradingView

As an investor who targets income, this was one of the main attractions for me when I decided to snap up some shares. Management also has a progressive dividend policy. In the last decade, its payout has grown by over 80%.

Time to buy?

All in all, at 231p, I think now could be a smart time to consider buying Legal & General shares. While I sit patiently for its share price to hopefully trend upwards, there’s substantial income on offer.

On top of that, I see Legal & General as well-placed to grow earnings in the years to come. The business will benefit massively from trends such as an ageing population in the UK.

This means it should see an increase in business for areas such as the Pension Risk Transfer market, which it’s already a leader in.

Analysts seem to agree. The firm’s earnings are forecast to steadily rise over the next couple of years. As such, its 12-month price target is 277.5p. That’s a 20.1% premium from its current price.

In the months to come, I’m expecting volatility with the stock. It may struggle in the near term with ongoing economic challenges like inflation.

We’ve seen its assets under management take a hit over the last couple of years as interest rate uncertainty has weakened investor confidence and led to many pulling their money from funds. Last year, its operating profit fell as a result.

But while it may look like it’s trading at a premium to its peers right now, I’m content paying the price given its strong brand recognition. I’m in for the long haul with Legal & General. I’m keen to add to my position in the coming weeks with any investable cash.