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 144 industry peers in the Insurance industry. Both the profitability and financial health of PFG have multiple concerns. PFG is not valued too expensively and it also shows a decent growth rate. Finally PFG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PFG had positive earnings in the past year.
PFG had a positive operating cash flow in the past year.
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
With a Return On Assets value of 0.35%, PFG is not doing good in the industry: 70.83% of the companies in the same industry are doing better.
PFG has a Return On Equity (9.69%) which is comparable to the rest of the industry.
PFG has a Return On Invested Capital of 0.37%. This is in the lower half of the industry: PFG underperforms 63.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PFG is below the industry average of 4.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 9.69% | ||
| ROIC | 0.37% |
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 (6.91%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of PFG has grown nicely.
Looking at the Operating Margin, with a value of 8.46%, PFG is in line with its industry, outperforming 43.06% of the companies in the same industry.
In the last couple of years the Operating Margin of PFG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.46% | ||
| PM (TTM) | 6.91% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PFG is destroying value.
PFG has less shares outstanding than it did 1 year ago.
PFG has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PFG has remained at the same level compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of PFG is 0.88, which is an excellent value as it means it would take PFG, only 0.88 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PFG (0.88) is better than 70.14% of its industry peers.
PFG has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.39, PFG is in line with its industry, outperforming 40.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 0.88 | ||
| Altman-Z | N/A |
ROIC/WACC0.04
WACC9.23%
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 6.09% 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.
Looking at the last year, PFG shows a small growth in Revenue. The Revenue has grown by 6.26% in the last year.
The Revenue has been decreasing by -0.73% on average over the past years.
EPS 1Y (TTM)6.09%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%9.7%
Revenue 1Y (TTM)6.26%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%5.48%
3.2 Future
PFG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.45% yearly.
The Revenue is expected to grow by 5.51% on average over the next years.
EPS Next Y16.75%
EPS Next 2Y14.14%
EPS Next 3Y12.77%
EPS Next 5Y12.45%
Revenue Next Year5.06%
Revenue Next 2Y4.64%
Revenue Next 3Y5.19%
Revenue Next 5Y5.51%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.28, the valuation of PFG can be described as very reasonable.
PFG's Price/Earnings ratio is in line with the industry average.
PFG is valuated cheaply when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 8.85, which indicates a very decent valuation of PFG.
63.89% of the companies in the same industry are more expensive than PFG, based on the Price/Forward Earnings ratio.
PFG is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.28 | ||
| Fwd PE | 8.85 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PFG is on the same level as its industry peers.
75.00% of the companies in the same industry are more expensive than PFG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.66 | ||
| EV/EBITDA | 9.2 |
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 12.77% in the coming years.
PEG (NY)0.67
PEG (5Y)2.48
EPS Next 2Y14.14%
EPS Next 3Y12.77%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 3.88%.
Compared to an average industry Dividend Yield of 3.51, PFG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, PFG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.88% |
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
61.20% of the earnings are spent on dividend by PFG. This is not a sustainable payout ratio.
PFG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP61.2%
EPS Next 2Y14.14%
EPS Next 3Y12.77%
80.51
-0.32 (-0.4%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners75.83%
Inst Owner Change2.66%
Ins Owners1.11%
Ins Owner Change7.93%
Market Cap18.05B
Analysts67.78
Price Target81.97 (1.81%)
Short Float %2.35%
Short Ratio4.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.88% |
Yearly Dividend2.85
Dividend Growth(5Y)5.52%
DP61.2%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.31%
Min EPS beat(2)-1.89%
Max EPS beat(2)-0.73%
EPS beat(4)0
Avg EPS beat(4)-7.15%
Min EPS beat(4)-13.6%
Max EPS beat(4)-0.73%
EPS beat(8)2
Avg EPS beat(8)-3.72%
EPS beat(12)5
Avg EPS beat(12)0.86%
EPS beat(16)9
Avg EPS beat(16)2.55%
Revenue beat(2)0
Avg Revenue beat(2)-2.58%
Min Revenue beat(2)-4.67%
Max Revenue beat(2)-0.49%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-7.1%
Max Revenue beat(4)6.25%
Revenue beat(8)4
Avg Revenue beat(8)1.76%
Revenue beat(12)8
Avg Revenue beat(12)3.73%
Revenue beat(16)9
Avg Revenue beat(16)1.02%
PT rev (1m)0.57%
PT rev (3m)-7.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.33%
EPS NY rev (1m)0.15%
EPS NY rev (3m)-4.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.69%
Revenue NY rev (1m)0.95%
Revenue NY rev (3m)-0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.28 | ||
| Fwd PE | 8.85 | ||
| P/S | 1.15 | ||
| P/FCF | 3.66 | ||
| P/OCF | 3.61 | ||
| P/B | 1.61 | ||
| P/tB | 2.16 | ||
| EV/EBITDA | 9.2 |
EPS(TTM)7.14
EY8.87%
EPS(NY)9.09
Fwd EY11.29%
FCF(TTM)21.98
FCFY27.3%
OCF(TTM)22.28
OCFY27.68%
SpS70.16
BVpS50.03
TBVpS37.28
PEG (NY)0.67
PEG (5Y)2.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 9.69% | ||
| ROCE | 0.43% | ||
| ROIC | 0.37% | ||
| ROICexc | 0.38% | ||
| ROICexgc | 1.02% | ||
| OM | 8.46% | ||
| PM (TTM) | 6.91% | ||
| GM | N/A | ||
| FCFM | 31.33% |
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-Score5
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 0.88 | ||
| Debt/EBITDA | 2.16 | ||
| Cap/Depr | 9.95% | ||
| Cap/Sales | 0.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 247.65% | ||
| Profit Quality | 453.49% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score5
WACC9.23%
ROIC/WACC0.04
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)6.09%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%9.7%
EPS Next Y16.75%
EPS Next 2Y14.14%
EPS Next 3Y12.77%
EPS Next 5Y12.45%
Revenue 1Y (TTM)6.26%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%5.48%
Revenue Next Year5.06%
Revenue Next 2Y4.64%
Revenue Next 3Y5.19%
Revenue Next 5Y5.51%
EBIT growth 1Y-28.41%
EBIT growth 3Y-9.8%
EBIT growth 5Y-3.23%
EBIT Next Year13.68%
EBIT Next 3Y7.61%
EBIT Next 5YN/A
FCF growth 1Y32.66%
FCF growth 3Y13.65%
FCF growth 5Y-3.29%
OCF growth 1Y30.22%
OCF growth 3Y12.66%
OCF growth 5Y-3.47%