We assign a fundamental rating of 3 out of 10 to PRU. PRU was compared to 148 industry peers in the Insurance industry. PRU may be in some trouble as it scores bad on both profitability and health. PRU has a valuation in line with the averages, but it does not seem to be growing. PRU also has an excellent dividend rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
The reported net income has been mixed in the past 5 years: PRU reported negative net income in multiple years.
PRU had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a Return On Assets value of 0.33%, PRU is not doing good in the industry: 81.76% of the companies in the same industry are doing better.
PRU has a Return On Equity of 8.05%. This is in the lower half of the industry: PRU underperforms 64.19% of its industry peers.
PRU has a Return On Invested Capital of 0.28%. This is in the lower half of the industry: PRU underperforms 71.62% of its industry peers.

		Industry Rank	Sector Rank
ROA	0.33%
ROE	8.05%
ROIC	0.28%

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

The Profit Margin of PRU (4.83%) is worse than 67.57% of its industry peers.
In the last couple of years the Profit Margin of PRU has declined.
PRU has a worse Operating Margin (4.87%) than 79.05% of its industry peers.
In the last couple of years the Operating Margin of PRU has declined.

		Industry Rank	Sector Rank
OM	4.87%
PM (TTM)	4.83%
GM	N/A

OM growth 3Y-39.41%

OM growth 5Y-14.76%

PM growth 3Y-30.9%

PM growth 5Y-8.56%

GM growth 3YN/A

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PRU is destroying value.
PRU has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PRU has less shares outstanding
Compared to 1 year ago, PRU has a worse debt to assets ratio.

2.2 Solvency

The Debt to FCF ratio of PRU is 4.18, which is a neutral value as it means it would take PRU, 4.18 years of fcf income to pay off all of its debts.
PRU has a worse Debt to FCF ratio (4.18) than 61.49% of its industry peers.
A Debt/Equity ratio of 0.67 indicates that PRU is somewhat dependend on debt financing.
PRU has a Debt to Equity ratio of 0.67. This is amonst the worse of the industry: PRU underperforms 83.11% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.67
Debt/FCF	4.18
Altman-Z	N/A

ROIC/WACC0.03

WACC8.46%

2.3 Liquidity

		Industry Rank	Sector Rank
Current Ratio	N/A
Quick Ratio	N/A

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 12.09% over the past year.
The Earnings Per Share has been growing slightly by 2.07% on average over the past years.
The Revenue for PRU has decreased by -24.65% in the past year. This is quite bad
PRU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.36% yearly.

EPS 1Y (TTM)12.09%

EPS 3Y-4.48%

EPS 5Y2.07%

EPS Q2Q%22.41%

Revenue 1Y (TTM)-24.65%

Revenue growth 3Y-2.22%

Revenue growth 5Y0.36%

Sales Q2Q%-16.64%

3.2 Future

PRU is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.81% yearly.
The Revenue is expected to grow by 0.18% on average over the next years.

EPS Next Y13.19%

EPS Next 2Y7.94%

EPS Next 3Y7.22%

EPS Next 5Y0.81%

Revenue Next Year-17.13%

Revenue Next 2Y-8.47%

Revenue Next 3Y-4.55%

Revenue Next 5Y0.18%

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 decreasing.
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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 7.64 indicates a rather cheap valuation of PRU.
75.00% of the companies in the same industry are more expensive than PRU, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.60, PRU is valued rather cheaply.
PRU is valuated cheaply with a Price/Forward Earnings ratio of 7.14.
75.68% of the companies in the same industry are more expensive than PRU, based on the Price/Forward Earnings ratio.
PRU is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	7.64
Fwd PE	7.14

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, PRU is valued a bit more expensive than the industry average as 62.16% of the companies are valued more cheaply.
PRU's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	7.15
EV/EBITDA	14.6

4.3 Compensation for Growth

PRU's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

PEG (NY)0.58

PEG (5Y)3.7

EPS Next 2Y7.94%

EPS Next 3Y7.22%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 4.96%, PRU is a good candidate for dividend investing.
PRU's Dividend Yield is rather good when compared to the industry average which is at 2.41. PRU pays more dividend than 84.46% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.82, PRU pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	4.96%

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 their dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)5.51%

Div Incr Years16

Div Non Decr Years16

5.3 Sustainability

74.23% of the earnings are spent on dividend by PRU. This is not a sustainable payout ratio.
The dividend of PRU is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.

DP74.23%

EPS Next 2Y7.94%

EPS Next 3Y7.22%

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PRUDENTIAL FINANCIAL INC / PRU FAQ

What is the fundamental rating for PRU stock?

ChartMill assigns a fundamental rating of 3 / 10 to PRU.

What is the valuation status of PRUDENTIAL FINANCIAL INC (PRU) stock?

ChartMill assigns a valuation rating of 6 / 10 to PRUDENTIAL FINANCIAL INC (PRU). This can be considered as Fairly Valued.

Can you provide the profitability details for PRUDENTIAL FINANCIAL INC?

PRUDENTIAL FINANCIAL INC (PRU) has a profitability rating of 2 / 10.

What is the valuation of PRUDENTIAL FINANCIAL INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for PRUDENTIAL FINANCIAL INC (PRU) is 7.64 and the Price/Book (PB) ratio is 1.17.

How sustainable is the dividend of PRUDENTIAL FINANCIAL INC (PRU) stock?

The dividend rating of PRUDENTIAL FINANCIAL INC (PRU) is 7 / 10 and the dividend payout ratio is 74.23%.