PRUDENTIAL FINANCIAL INC (PRU) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PRU - US7443201022 - Common Stock
106.9 USD
-2.08 (-1.91%)
PRU gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 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 it does not seem to be growing. Finally PRU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- PRU had positive earnings in the past year.
- PRU had a positive operating cash flow in the past year.
- In multiple years PRU reported negative net income over the last 5 years.
- Each year in the past 5 years PRU had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 0.33%, PRU is doing worse than 81.76% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 8.05%, PRU is doing worse than 64.19% of the companies in the same industry.
- PRU's Return On Invested Capital of 0.28% is on the low side compared to the rest of the industry. PRU is outperformed by 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
- PRU has a worse Profit Margin (4.83%) than 67.57% of its industry peers.
- In the last couple of years the Profit Margin of PRU has declined.
- PRU has a Operating Margin of 4.87%. This is in the lower half of the industry: PRU underperforms 79.05% of its industry peers.
- PRU's Operating Margin has declined in the last couple of years.
| 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
- 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.
- With a Debt to FCF ratio value of 4.18, PRU is not doing good in the industry: 61.49% of the companies in the same industry are doing better.
- PRU has a Debt/Equity ratio of 0.67. This is a neutral value indicating 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
WACC8.47%
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 12.09%, which is quite good.
- The Earnings Per Share has been growing slightly by 2.07% on average over the past years.
- Looking at the last year, PRU shows a very negative growth in Revenue. The Revenue has decreased by -24.65% in the last year.
- 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.
- 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
- A Price/Earnings ratio of 7.59 indicates a rather cheap valuation of PRU.
- Compared to the rest of the industry, the Price/Earnings ratio of PRU indicates a somewhat cheap valuation: PRU is cheaper than 75.00% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. PRU is valued rather cheaply when compared to this.
- Based on the Price/Forward Earnings ratio of 7.08, 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.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, PRU is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.59 | ||
| Fwd PE | 7.08 |
4.2 Price Multiples
- 61.49% of the companies in the same industry are cheaper than PRU, based on the Enterprise Value to EBITDA ratio.
- The rest of the industry has a similar Price/Free Cash Flow ratio as PRU.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.09 | ||
| EV/EBITDA | 14.76 |
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)3.67
EPS Next 2Y7.94%
EPS Next 3Y7.22%
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 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
- 74.23% of the earnings are spent on dividend by PRU. This is not a sustainable payout ratio.
- PRU's earnings are growing slower than its dividend. 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 7.59 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%.