PRUDENTIAL FINANCIAL INC (PRU) Stock Fundamental Analysis
NYSE:PRU - New York Stock Exchange, Inc. - US7443201022 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to PRU. PRU was compared to 145 industry peers in the Insurance industry. PRU has a bad profitability rating. Also its financial health evaluation is rather negative. PRU has a valuation in line with the averages, but on the other hand it scores bad on growth. PRU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PRU had positive earnings in the past year.
In the past year PRU had a positive cash flow from operations.
In multiple years PRU reported negative net income over the last 5 years.
In the past 5 years PRU always reported a positive cash flow from operatings.
1.2 Ratios
PRU has a worse Return On Assets (0.31%) than 73.79% of its industry peers.
PRU has a worse Return On Equity (7.59%) than 61.38% of its industry peers.
With a Return On Invested Capital value of 0.31%, PRU is not doing good in the industry: 66.90% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.31% | ||
| ROE | 7.59% | ||
| ROIC | 0.31% |
ROA(3y)0.15%
ROA(5y)0.27%
ROE(3y)4.35%
ROE(5y)5.32%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
PRU has a worse Profit Margin (3.96%) than 66.21% of its industry peers.
In the last couple of years the Profit Margin of PRU has declined.
With a Operating Margin value of 4.78%, PRU is not doing good in the industry: 77.93% of the companies in the same industry are doing better.
PRU's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.78% | ||
| PM (TTM) | 3.96% | ||
| GM | N/A |
OM growth 3Y-33.92%
OM growth 5Y-10.21%
PM growth 3Y-30.9%
PM growth 5Y-8.56%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
PRU 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, PRU has less shares outstanding
The number of shares outstanding for PRU has been reduced compared to 5 years ago.
PRU has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of PRU is 28.89, which is on the high side as it means it would take PRU, 28.89 years of fcf income to pay off all of its debts.
PRU has a Debt to FCF ratio of 28.89. This is in the lower half of the industry: PRU underperforms 78.62% of its industry peers.
A Debt/Equity ratio of 0.72 indicates that PRU is somewhat dependend on debt financing.
PRU has a worse Debt to Equity ratio (0.72) than 85.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 28.89 | ||
| Altman-Z | N/A |
ROIC/WACC0.04
WACC8.53%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
PRU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.61%, which is quite good.
The Earnings Per Share has been growing slightly by 2.07% on average over the past years.
The Revenue has decreased by -0.67% in the past year.
PRU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.36% yearly.
EPS 1Y (TTM)8.61%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%5.45%
Revenue 1Y (TTM)-0.67%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-38.19%
3.2 Future
The Earnings Per Share is expected to decrease by -0.51% on average over the next years.
Based on estimates for the next years, PRU will show a decrease in Revenue. The Revenue will decrease by -1.53% on average per year.
EPS Next Y6.59%
EPS Next 2Y7.41%
EPS Next 3Y7.19%
EPS Next 5Y-0.51%
Revenue Next Year-18.65%
Revenue Next 2Y-7.56%
Revenue Next 3Y-2.7%
Revenue Next 5Y-1.53%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
PRU is valuated reasonably with a Price/Earnings ratio of 8.07.
75.86% of the companies in the same industry are more expensive than PRU, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of PRU to the average of the S&P500 Index (27.30), we can say PRU is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.09, the valuation of PRU can be described as very cheap.
Based on the Price/Forward Earnings ratio, PRU is valued a bit cheaper than the industry average as 72.41% of the companies are valued more expensively.
PRU 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 | 8.07 | ||
| Fwd PE | 7.09 |
4.2 Price Multiples
PRU's Enterprise Value to EBITDA ratio is in line with the industry average.
PRU's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. PRU is more expensive than 77.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.39 | ||
| EV/EBITDA | 14.01 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.23
PEG (5Y)3.9
EPS Next 2Y7.41%
EPS Next 3Y7.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.90%, PRU is a good candidate for dividend investing.
PRU's Dividend Yield is rather good when compared to the industry average which is at 3.64. PRU pays more dividend than 82.76% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, PRU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
5.2 History
The dividend of PRU has a limited annual growth rate of 5.51%.
PRU has been paying a dividend for at least 10 years, so it has a reliable track record.
PRU has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.51%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
PRU pays out 83.73% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of PRU has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP83.73%
EPS Next 2Y7.41%
EPS Next 3Y7.19%
105.94
-1.21 (-1.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners61.13%
Inst Owner Change0%
Ins Owners0.12%
Ins Owner Change7.04%
Market Cap37.50B
Analysts66.67
Price Target114.92 (8.48%)
Short Float %1.81%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.9% |
Yearly Dividend5.3
Dividend Growth(5Y)5.51%
DP83.73%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.67%
Min EPS beat(2)-9.72%
Max EPS beat(2)2.38%
EPS beat(4)1
Avg EPS beat(4)-2.76%
Min EPS beat(4)-9.72%
Max EPS beat(4)2.38%
EPS beat(8)2
Avg EPS beat(8)-1.11%
EPS beat(12)3
Avg EPS beat(12)-3.75%
EPS beat(16)7
Avg EPS beat(16)3.89%
Revenue beat(2)0
Avg Revenue beat(2)-9.7%
Min Revenue beat(2)-12.43%
Max Revenue beat(2)-6.96%
Revenue beat(4)2
Avg Revenue beat(4)2.85%
Min Revenue beat(4)-12.43%
Max Revenue beat(4)29.51%
Revenue beat(8)3
Avg Revenue beat(8)4.39%
Revenue beat(12)5
Avg Revenue beat(12)5.78%
Revenue beat(16)8
Avg Revenue beat(16)9.23%
PT rev (1m)-0.52%
PT rev (3m)-10.23%
EPS NQ rev (1m)-0.36%
EPS NQ rev (3m)-5.92%
EPS NY rev (1m)0.09%
EPS NY rev (3m)-4.02%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-5.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.07 | ||
| Fwd PE | 7.09 | ||
| P/S | 0.65 | ||
| P/FCF | 48.39 | ||
| P/OCF | 48.39 | ||
| P/B | 1.25 | ||
| P/tB | 1.25 | ||
| EV/EBITDA | 14.01 |
EPS(TTM)13.12
EY12.38%
EPS(NY)14.94
Fwd EY14.1%
FCF(TTM)2.19
FCFY2.07%
OCF(TTM)2.19
OCFY2.07%
SpS161.84
BVpS84.42
TBVpS84.42
PEG (NY)1.23
PEG (5Y)3.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.31% | ||
| ROE | 7.59% | ||
| ROCE | 0.37% | ||
| ROIC | 0.31% | ||
| ROICexc | 0.31% | ||
| ROICexgc | 0.48% | ||
| OM | 4.78% | ||
| PM (TTM) | 3.96% | ||
| GM | N/A | ||
| FCFM | 1.35% |
ROA(3y)0.15%
ROA(5y)0.27%
ROE(3y)4.35%
ROE(5y)5.32%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-28.02%
ROICexcg growth 5Y-7.81%
ROICexc growth 3Y-30.1%
ROICexc growth 5Y-6.51%
OM growth 3Y-33.92%
OM growth 5Y-10.21%
PM growth 3Y-30.9%
PM growth 5Y-8.56%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 28.89 | ||
| Debt/EBITDA | 6.89 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 24.82% | ||
| Profit Quality | 34.17% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score6
WACC8.53%
ROIC/WACC0.04
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.61%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%5.45%
EPS Next Y6.59%
EPS Next 2Y7.41%
EPS Next 3Y7.19%
EPS Next 5Y-0.51%
Revenue 1Y (TTM)-0.67%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-38.19%
Revenue Next Year-18.65%
Revenue Next 2Y-7.56%
Revenue Next 3Y-2.7%
Revenue Next 5Y-1.53%
EBIT growth 1Y-1.9%
EBIT growth 3Y-35.38%
EBIT growth 5Y-9.89%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-87.37%
FCF growth 3Y-4.66%
FCF growth 5Y-15.41%
OCF growth 1Y-87.37%
OCF growth 3Y-4.66%
OCF growth 5Y-15.41%