PRUDENTIAL FINANCIAL INC (PRU) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PRU - US7443201022 - Common Stock
107.42 USD
-1.56 (-1.43%)
107 USD
-0.42 (-0.39%)
Taking everything into account, PRU scores 3 out of 10 in our fundamental rating. PRU was compared to 148 industry peers in the Insurance industry. Both the profitability and financial health of PRU have multiple concerns. 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.
- PRU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- PRU has a Return On Assets of 0.33%. This is amonst the worse of the industry: PRU underperforms 81.76% of its industry peers.
- 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
- With a Profit Margin value of 4.83%, PRU is not doing good in the industry: 67.57% of the companies in the same industry are doing better.
- PRU's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 4.87%, PRU is doing worse than 79.05% of the companies in the same industry.
- 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
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PRU is destroying value.
- Compared to 1 year ago, PRU has less shares outstanding
- 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
- PRU has a debt to FCF ratio of 4.18. This is a neutral value as PRU would need 4.18 years to pay back of all of its debts.
- PRU has a Debt to FCF ratio of 4.18. This is in the lower half of the industry: PRU underperforms 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
WACC8.45%
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 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.
- PRU shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -24.65%.
- The Revenue has been growing slightly by 0.36% on average over the past years.
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
- The Earnings Per Share is expected to grow by 0.81% on average over the next years.
- Based on estimates for the next years, PRU will show a small growth in Revenue. The Revenue will grow by 0.18% on average per year.
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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 7.62, the valuation of PRU can be described as very cheap.
- PRU's Price/Earnings ratio is a bit cheaper when compared to the industry. PRU is cheaper than 75.00% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.82. PRU is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 7.12, the valuation of PRU can be described as very cheap.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PRU indicates a somewhat cheap valuation: PRU is cheaper than 75.68% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of PRU to the average of the S&P500 Index (25.95), we can say PRU is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.62 | ||
| Fwd PE | 7.12 |
4.2 Price Multiples
- 62.16% of the companies in the same industry are cheaper than PRU, based on the Enterprise Value to EBITDA ratio.
- PRU's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.13 | ||
| EV/EBITDA | 14.57 |
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)3.69
EPS Next 2Y7.94%
EPS Next 3Y7.22%
5. Dividend
5.1 Amount
- PRU has a Yearly Dividend Yield of 4.96%, which is a nice return.
- Compared to an average industry Dividend Yield of 2.41, PRU pays a better dividend. On top of this PRU pays more dividend than 84.46% of the companies listed 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 paid a dividend for at least 10 years, which is 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
- PRU pays out 74.23% of its income as dividend. 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%
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 7.62 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%.