PRINCIPAL FINANCIAL GROUP (PFG) Stock Fundamental Analysis
NASDAQ:PFG - Nasdaq - US74251V1026 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to PFG. PFG was compared to 143 industry peers in the Insurance industry. There are concerns on the financial health of PFG while its profitability can be described as average. PFG is not valued too expensively and it also shows a decent growth rate. PFG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PFG had positive earnings in the past year.
In the past year PFG had a positive cash flow from operations.
Each year in the past 5 years PFG has been profitable.
PFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.50%, PFG is doing worse than 72.54% of the companies in the same industry.
With a decent Return On Equity value of 14.17%, PFG is doing good in the industry, outperforming 61.27% of the companies in the same industry.
PFG's Return On Invested Capital of 0.41% is on the low side compared to the rest of the industry. PFG is outperformed by 64.79% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PFG is below the industry average of 4.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 14.17% | ||
| ROIC | 0.41% |
ROA(3y)0.78%
ROA(5y)0.67%
ROE(3y)22.52%
ROE(5y)17.16%
ROIC(3y)0.56%
ROIC(5y)0.55%
1.3 Margins
The Profit Margin of PFG (10.02%) is better than 61.27% of its industry peers.
In the last couple of years the Profit Margin of PFG has grown nicely.
PFG has a Operating Margin (9.39%) which is comparable to the rest of the industry.
PFG's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.39% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A |
OM growth 3Y-12.61%
OM growth 5Y-2.51%
PM growth 3Y-3.3%
PM growth 5Y3.17%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
PFG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, PFG has less shares outstanding
The number of shares outstanding for PFG has been reduced compared to 5 years ago.
Compared to 1 year ago, PFG has about the same debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of PFG is 0.91, which is an excellent value as it means it would take PFG, only 0.91 years of fcf income to pay off all of its debts.
PFG has a Debt to FCF ratio of 0.91. This is in the better half of the industry: PFG outperforms 66.90% of its industry peers.
PFG has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
PFG has a Debt to Equity ratio (0.37) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC8.03%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.40% over the past year.
PFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
The Revenue has grown by 8.94% in the past year. This is quite good.
The Revenue has been decreasing by -0.73% on average over the past years.
EPS 1Y (TTM)6.4%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%6.01%
Revenue 1Y (TTM)8.94%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%-6.5%
3.2 Future
Based on estimates for the next years, PFG will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.97% on average per year.
PFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.98% yearly.
EPS Next Y21.38%
EPS Next 2Y15.77%
EPS Next 3Y13.97%
EPS Next 5YN/A
Revenue Next Year5.77%
Revenue Next 2Y5.63%
Revenue Next 3Y4.98%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 12.70 indicates a correct valuation of PFG.
Compared to the rest of the industry, the Price/Earnings ratio of PFG is on the same level as its industry peers.
PFG is valuated cheaply when we compare the Price/Earnings ratio to 29.75, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.46, which indicates a very decent valuation of PFG.
Based on the Price/Forward Earnings ratio, PFG is valued a bit cheaper than 61.97% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of PFG to the average of the S&P500 Index (22.44), we can say PFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.7 | ||
| Fwd PE | 10.46 |
4.2 Price Multiples
PFG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PFG is cheaper than 63.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PFG is valued a bit cheaper than the industry average as 73.24% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.47 | ||
| EV/EBITDA | 9.31 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as PFG's earnings are expected to grow with 13.97% in the coming years.
PEG (NY)0.59
PEG (5Y)2.8
EPS Next 2Y15.77%
EPS Next 3Y13.97%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 3.43%.
PFG's Dividend Yield is a higher than the industry average which is at 3.06.
PFG's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
5.2 History
The dividend of PFG has a limited annual growth rate of 5.52%.
PFG has been paying a dividend for at least 10 years, so it has a reliable track record.
PFG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.52%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
41.91% of the earnings are spent on dividend by PFG. This is a bit on the high side, but may be sustainable.
PFG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.91%
EPS Next 2Y15.77%
EPS Next 3Y13.97%
88.64
-0.4 (-0.45%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.47%
Inst Owner Change-0.14%
Ins Owners1.03%
Ins Owner Change8.25%
Market Cap20.27B
Analysts67.37
Price Target89.08 (0.5%)
Short Float %1.03%
Short Ratio1.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
Yearly Dividend2.85
Dividend Growth(5Y)5.52%
DP41.91%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.17%
Min EPS beat(2)-13.6%
Max EPS beat(2)-0.73%
EPS beat(4)0
Avg EPS beat(4)-8.08%
Min EPS beat(4)-13.6%
Max EPS beat(4)-0.73%
EPS beat(8)2
Avg EPS beat(8)-3.88%
EPS beat(12)6
Avg EPS beat(12)1.3%
EPS beat(16)10
Avg EPS beat(16)3.48%
Revenue beat(2)0
Avg Revenue beat(2)-5.89%
Min Revenue beat(2)-7.1%
Max Revenue beat(2)-4.67%
Revenue beat(4)2
Avg Revenue beat(4)-0.76%
Min Revenue beat(4)-7.1%
Max Revenue beat(4)6.25%
Revenue beat(8)5
Avg Revenue beat(8)2.69%
Revenue beat(12)8
Avg Revenue beat(12)2.66%
Revenue beat(16)9
Avg Revenue beat(16)-0.07%
PT rev (1m)0.19%
PT rev (3m)-2.86%
EPS NQ rev (1m)-0.91%
EPS NQ rev (3m)0.22%
EPS NY rev (1m)0.27%
EPS NY rev (3m)-0.52%
Revenue NQ rev (1m)-1.67%
Revenue NQ rev (3m)-2.15%
Revenue NY rev (1m)-1.21%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.7 | ||
| Fwd PE | 10.46 | ||
| P/S | 1.29 | ||
| P/FCF | 4.47 | ||
| P/OCF | 4.4 | ||
| P/B | 1.83 | ||
| P/tB | 2.49 | ||
| EV/EBITDA | 9.31 |
EPS(TTM)6.98
EY7.87%
EPS(NY)8.47
Fwd EY9.56%
FCF(TTM)19.82
FCFY22.36%
OCF(TTM)20.12
OCFY22.7%
SpS68.55
BVpS48.47
TBVpS35.62
PEG (NY)0.59
PEG (5Y)2.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 14.17% | ||
| ROCE | 0.47% | ||
| ROIC | 0.41% | ||
| ROICexc | 0.42% | ||
| ROICexgc | 1.15% | ||
| OM | 9.39% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A | ||
| FCFM | 28.92% |
ROA(3y)0.78%
ROA(5y)0.67%
ROE(3y)22.52%
ROE(5y)17.16%
ROIC(3y)0.56%
ROIC(5y)0.55%
ROICexc(3y)0.57%
ROICexc(5y)0.56%
ROICexgc(3y)1.58%
ROICexgc(5y)1.52%
ROCE(3y)0.64%
ROCE(5y)0.63%
ROICexcg growth 3Y-8.99%
ROICexcg growth 5Y-5.01%
ROICexc growth 3Y-10.54%
ROICexc growth 5Y-5.59%
OM growth 3Y-12.61%
OM growth 5Y-2.51%
PM growth 3Y-3.3%
PM growth 5Y3.17%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Debt/EBITDA | 1.9 | ||
| Cap/Depr | 10.01% | ||
| Cap/Sales | 0.44% | ||
| Interest Coverage | 8.65 | ||
| Cash Conversion | 213.13% | ||
| Profit Quality | 288.61% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC8.03%
ROIC/WACC0.05
Cap/Depr(3y)13.6%
Cap/Depr(5y)15.82%
Cap/Sales(3y)0.66%
Cap/Sales(5y)0.72%
Profit Quality(3y)315.01%
Profit Quality(5y)280.11%
High Growth Momentum
Growth
EPS 1Y (TTM)6.4%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%6.01%
EPS Next Y21.38%
EPS Next 2Y15.77%
EPS Next 3Y13.97%
EPS Next 5YN/A
Revenue 1Y (TTM)8.94%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%-6.5%
Revenue Next Year5.77%
Revenue Next 2Y5.63%
Revenue Next 3Y4.98%
Revenue Next 5YN/A
EBIT growth 1Y-20.56%
EBIT growth 3Y-9.8%
EBIT growth 5Y-3.23%
EBIT Next Year19.88%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y22.86%
FCF growth 3Y13.65%
FCF growth 5Y-3.29%
OCF growth 1Y21.37%
OCF growth 3Y12.66%
OCF growth 5Y-3.47%