PRINCIPAL FINANCIAL GROUP (PFG) Stock Fundamental Analysis
NASDAQ:PFG - Nasdaq - US74251V1026 - Common Stock - Currency: USD
Overall PFG gets a fundamental rating of 4 out of 10. We evaluated PFG against 143 industry peers in the Insurance industry. PFG has a medium profitability rating, but doesn't score so well on its financial health evaluation. PFG scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally 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.
In the past 5 years PFG has always been profitable.
PFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PFG has a Return On Assets of 0.50%. This is in the lower half of the industry: PFG underperforms 74.13% of its industry peers.
The Return On Equity of PFG (14.17%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 0.41%, PFG is doing worse than 64.34% of the companies in the same industry.
PFG had an Average Return On Invested Capital over the past 3 years of 0.56%. This is below the industry average of 4.47%.
| 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
PFG has a Profit Margin of 10.02%. This is in the better half of the industry: PFG outperforms 62.24% 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 in line with its industry peers.
In the last couple of years the Operating Margin of PFG has declined.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PFG is destroying value.
The number of shares outstanding for PFG has been reduced compared to 1 year ago.
Compared to 5 years ago, PFG has less shares outstanding
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.
With a decent Debt to FCF ratio value of 0.91, PFG is doing good in the industry, outperforming 66.43% of the companies in the same industry.
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 of 0.37. This is comparable to the rest of the industry: PFG outperforms 44.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC7.89%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
PFG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.40%.
PFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
PFG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.94%.
PFG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.73% yearly.
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
PFG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.70% yearly.
Based on estimates for the next years, PFG will show a small growth in Revenue. The Revenue will grow by 5.15% on average per year.
EPS Next Y18.29%
EPS Next 2Y14.15%
EPS Next 3Y12.93%
EPS Next 5Y12.7%
Revenue Next Year3.89%
Revenue Next 2Y4.11%
Revenue Next 3Y4.16%
Revenue Next 5Y5.15%
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
PFG is valuated reasonably with a Price/Earnings ratio of 10.34.
Based on the Price/Earnings ratio, PFG is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.29. PFG is valued rather cheaply when compared to this.
PFG is valuated reasonably with a Price/Forward Earnings ratio of 8.74.
Based on the Price/Forward Earnings ratio, PFG is valued a bit cheaper than 67.83% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of PFG to the average of the S&P500 Index (21.08), we can say PFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.34 | ||
| Fwd PE | 8.74 |
4.2 Price Multiples
64.34% of the companies in the same industry are more expensive than PFG, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 75.52% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.58 | ||
| EV/EBITDA | 7.4 |
4.3 Compensation for Growth
PFG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PFG's earnings are expected to grow with 12.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.56
PEG (5Y)2.28
EPS Next 2Y14.15%
EPS Next 3Y12.93%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 4.16%, which is a nice return.
Compared to an average industry Dividend Yield of 3.28, PFG pays a better dividend. On top of this PFG pays more dividend than 81.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, PFG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.16% |
5.2 History
The dividend of PFG has a limited annual growth rate of 5.52%.
PFG has paid a dividend for at least 10 years, which is 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
PFG pays out 41.91% of its income as dividend. 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 2Y14.15%
EPS Next 3Y12.93%
72.14
+0.5 (+0.7%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.47%
Inst Owner Change0.43%
Ins Owners1.03%
Ins Owner Change7.14%
Market Cap16.23B
Analysts67.37
Price Target89 (23.37%)
Short Float %1.8%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.16% |
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%
PT rev (3m)-1.26%
EPS NQ rev (1m)-3.85%
EPS NQ rev (3m)-4.18%
EPS NY rev (1m)-2.55%
EPS NY rev (3m)-2.66%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-1.75%
Revenue NY rev (3m)-3.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.34 | ||
| Fwd PE | 8.74 | ||
| P/S | 1.04 | ||
| P/FCF | 3.58 | ||
| P/OCF | 3.53 | ||
| P/B | 1.46 | ||
| P/tB | 1.99 | ||
| EV/EBITDA | 7.4 |
EPS(TTM)6.98
EY9.68%
EPS(NY)8.26
Fwd EY11.45%
FCF(TTM)20.15
FCFY27.94%
OCF(TTM)20.46
OCFY28.36%
SpS69.7
BVpS49.28
TBVpS36.21
PEG (NY)0.56
PEG (5Y)2.28
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
WACC7.89%
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 Y18.29%
EPS Next 2Y14.15%
EPS Next 3Y12.93%
EPS Next 5Y12.7%
Revenue 1Y (TTM)8.94%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%-6.5%
Revenue Next Year3.89%
Revenue Next 2Y4.11%
Revenue Next 3Y4.16%
Revenue Next 5Y5.15%
EBIT growth 1Y-20.56%
EBIT growth 3Y-9.8%
EBIT growth 5Y-3.23%
EBIT Next Year17.86%
EBIT Next 3Y9.62%
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%