It hasn’t been the best year for Legal & General (LSE: LGEN). Its share price has taken an 8% hit in 2024. On the flip side, the FTSE 100 is up 7.5%.

But with the stock falling this year, I’ve been watching it closely. In fact, I reckon now could be a smart time for me to consider buying some shares. That’s what I’m doing right now for my portfolio.

Rising yield

One reason for that is because of the financial service stalwart’s dividend. A falling share price means a higher yield. As such, the stock currently has a thumping 9% payout.

That’s the third-highest on the FTSE 100. And it clears the index average 3.6% yield with ease. What makes it even better is that its dividend has been rising in recent years largely due to management’s actions.

In the last decade, its payout has climbed by over 80%. Given that dividends are never guaranteed, it’s actions like these that fill me with confidence when targeting stocks for passive income.

We’ve also seen management put emphasis on rewarding shareholders in more recent times. For example, the firm is set to end its five-year cumulative dividend plan this year. During that time, it would have returned nearly £6bn to shareholders through the scheme. This year, the board has signalled its intention to grow the dividend by 5%.

A bright future?

What I also like about Legal & General is that I think the firm is well-positioned to capitalise on trends such as the ageing UK population. In the next 25 years, predictions have the number of people older than 85 in the UK doubling to 2.6m.

With people living longer, there will naturally be a rise in demand for retirement, wealth, and protection products. Legal & General will benefit massively from this. It’s already a leader in areas such as the pension risk transfer market.

Issues along the way

That said, while I see long-term value in Legal & General, it won’t be a smooth journey for the business. Inflation and high interest rates still pose a challenge. While it may feel like we’re out of the woods, economic uncertainty is ongoing and presents a threat to the firm’s operations.

For example, a delay in future cuts would harm investor confidence, which could see customers pull their money out of funds. Over the past couple of years, the business has seen its assets under management (AUM) take a hit. Most recently, we saw this in the first half of the year, when total AUM for its asset management division fell by 3%.

Long-term outlook

But as a long-term buy, I’m bullish on the FTSE 100 stalwart. Its shares look decently priced, trading on a forward price-to-earnings ratio of just 9.1. Couple that with its meaty yield and future growth prospects, and I think Legal & General could be a shrewd buy. If I had the cash, I’d snap up some cheap shares today.