PRINCIPAL FINANCIAL GROUP (PFG) Stock Fundamental Analysis
NASDAQ:PFG - Nasdaq - US74251V1026 - Common Stock - Currency: USD
PFG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 144 industry peers in the Insurance industry. While PFG seems to be doing ok healthwise, there are quite some concerns on its profitability. PFG has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years PFG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of -0.06%, PFG is not doing good in the industry: 78.17% of the companies in the same industry are doing better.
PFG has a Return On Equity of -1.83%. This is in the lower half of the industry: PFG underperforms 78.87% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.41%, PFG is doing worse than 66.20% of the companies in the same industry.
PFG had an Average Return On Invested Capital over the past 3 years of 0.60%. This is below the industry average of 4.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.06% | ||
| ROE | -1.83% | ||
| ROIC | 0.41% |
ROA(3y)0.79%
ROA(5y)0.67%
ROE(3y)21.07%
ROE(5y)16.24%
ROIC(3y)0.6%
ROIC(5y)0.57%
1.3 Margins
In the last couple of years the Profit Margin of PFG has declined.
Looking at the Operating Margin, with a value of 9.79%, PFG is in line with its industry, outperforming 50.70% of the companies in the same industry.
In the last couple of years the Operating Margin of PFG has remained more or less at the same level.
The Profit Margin and Gross Margin are not available for PFG so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.79% | ||
| PM (TTM) | N/A | ||
| GM | N/A |
OM growth 3Y3.04%
OM growth 5Y-0.21%
PM growth 3Y-23.59%
PM growth 5Y-17.18%
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.
PFG has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PFG has less shares outstanding
PFG has a better debt/assets ratio than last year.
2.2 Solvency
PFG has a debt to FCF ratio of 0.99. This is a very positive value and a sign of high solvency as it would only need 0.99 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.99, PFG is in the better half of the industry, outperforming 66.90% of the companies in the same industry.
PFG has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.35, PFG is in line with its industry, outperforming 42.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 0.99 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC8.15%
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 6.84% over the past year.
The Earnings Per Share has been growing slightly by 3.48% on average over the past years.
Looking at the last year, PFG shows a quite strong growth in Revenue. The Revenue has grown by 13.53% in the last year.
PFG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.67% yearly.
EPS 1Y (TTM)6.84%
EPS 3Y9.92%
EPS 5Y3.48%
EPS Q2Q%2.33%
Revenue 1Y (TTM)13.53%
Revenue growth 3Y0.02%
Revenue growth 5Y0.67%
Sales Q2Q%2.18%
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 12.22% yearly.
Based on estimates for the next years, PFG will show a quite strong growth in Revenue. The Revenue will grow by 8.00% on average per year.
EPS Next Y8.3%
EPS Next 2Y13.71%
EPS Next 3Y12.7%
EPS Next 5Y12.22%
Revenue Next Year10.77%
Revenue Next 2Y8.96%
Revenue Next 3Y7.69%
Revenue Next 5Y8%
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 12.00, PFG is valued correctly.
PFG's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.46. PFG is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 9.72, which indicates a very decent valuation of PFG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 62.68% of the companies listed in the same industry.
PFG is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12 | ||
| Fwd PE | 9.72 |
4.2 Price Multiples
69.01% of the companies in the same industry are more expensive than PFG, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, PFG is valued a bit cheaper than the industry average as 71.13% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.71 | ||
| EV/EBITDA | 7.47 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PFG's earnings are expected to grow with 12.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.45
PEG (5Y)3.45
EPS Next 2Y13.71%
EPS Next 3Y12.7%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 3.57%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.11, PFG pays a bit more dividend than its industry peers.
PFG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
5.2 History
The dividend of PFG has a limited annual growth rate of 4.37%.
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)4.37%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
PFG has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of PFG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-316.21%
EPS Next 2Y13.71%
EPS Next 3Y12.7%
PRINCIPAL FINANCIAL GROUP
NASDAQ:PFG (1/31/2025, 8:00:00 PM)
After market: 82.45 0 (0%)82.45
-1.06 (-1.27%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.79%
Inst Owner Change-0.05%
Ins Owners1.04%
Ins Owner Change0.18%
Market Cap18.86B
Analysts54.29
Price Target90.13 (9.31%)
Short Float %1.2%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
Yearly Dividend2.61
Dividend Growth(5Y)4.37%
DP-316.21%
Div Incr Years16
Div Non Decr Years16
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-13%
Min EPS beat(2)-13.6%
Max EPS beat(2)-12.39%
EPS beat(4)1
Avg EPS beat(4)-6.01%
Min EPS beat(4)-13.6%
Max EPS beat(4)7.54%
EPS beat(8)3
Avg EPS beat(8)-2.56%
EPS beat(12)7
Avg EPS beat(12)2.29%
EPS beat(16)11
Avg EPS beat(16)3.71%
Revenue beat(2)1
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-7.1%
Max Revenue beat(2)6.25%
Revenue beat(4)3
Avg Revenue beat(4)4.81%
Min Revenue beat(4)-7.1%
Max Revenue beat(4)17.61%
Revenue beat(8)6
Avg Revenue beat(8)4.77%
Revenue beat(12)9
Avg Revenue beat(12)3.5%
Revenue beat(16)9
Avg Revenue beat(16)-0.12%
PT rev (1m)-1.72%
PT rev (3m)3.15%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.53%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.15%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-2.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12 | ||
| Fwd PE | 9.72 | ||
| P/S | 1.19 | ||
| P/FCF | 4.71 | ||
| P/OCF | 4.61 | ||
| P/B | 1.68 | ||
| P/tB | 2.3 | ||
| EV/EBITDA | 7.47 |
EPS(TTM)6.87
EY8.33%
EPS(NY)8.48
Fwd EY10.29%
FCF(TTM)17.52
FCFY21.25%
OCF(TTM)17.87
OCFY21.68%
SpS69.48
BVpS49.13
TBVpS35.92
PEG (NY)1.45
PEG (5Y)3.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.06% | ||
| ROE | -1.83% | ||
| ROCE | 0.48% | ||
| ROIC | 0.41% | ||
| ROICexc | 0.42% | ||
| ROICexgc | 1.19% | ||
| OM | 9.79% | ||
| PM (TTM) | N/A | ||
| GM | N/A | ||
| FCFM | 25.22% |
ROA(3y)0.79%
ROA(5y)0.67%
ROE(3y)21.07%
ROE(5y)16.24%
ROIC(3y)0.6%
ROIC(5y)0.57%
ROICexc(3y)0.61%
ROICexc(5y)0.57%
ROICexgc(3y)1.66%
ROICexgc(5y)1.55%
ROCE(3y)0.71%
ROCE(5y)0.66%
ROICexcg growth 3Y4.65%
ROICexcg growth 5Y-2.85%
ROICexc growth 3Y2.3%
ROICexc growth 5Y-3.93%
OM growth 3Y3.04%
OM growth 5Y-0.21%
PM growth 3Y-23.59%
PM growth 5Y-17.18%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 0.99 | ||
| Debt/EBITDA | 1.76 | ||
| Cap/Depr | 11.39% | ||
| Cap/Sales | 0.5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 181.21% | ||
| Profit Quality | N/A | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score5
WACC8.15%
ROIC/WACC0.05
Cap/Depr(3y)17.57%
Cap/Depr(5y)18.24%
Cap/Sales(3y)0.81%
Cap/Sales(5y)0.8%
Profit Quality(3y)283.97%
Profit Quality(5y)299.3%
High Growth Momentum
Growth
EPS 1Y (TTM)6.84%
EPS 3Y9.92%
EPS 5Y3.48%
EPS Q2Q%2.33%
EPS Next Y8.3%
EPS Next 2Y13.71%
EPS Next 3Y12.7%
EPS Next 5Y12.22%
Revenue 1Y (TTM)13.53%
Revenue growth 3Y0.02%
Revenue growth 5Y0.67%
Sales Q2Q%2.18%
Revenue Next Year10.77%
Revenue Next 2Y8.96%
Revenue Next 3Y7.69%
Revenue Next 5Y8%
EBIT growth 1Y-26.6%
EBIT growth 3Y3.06%
EBIT growth 5Y0.46%
EBIT Next Year15.43%
EBIT Next 3Y10.53%
EBIT Next 5YN/A
FCF growth 1Y32.97%
FCF growth 3Y0.55%
FCF growth 5Y-6.13%
OCF growth 1Y30.96%
OCF growth 3Y0.48%
OCF growth 5Y-5.96%