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 143 industry peers in the Insurance industry. There are concerns on the financial health of PFG while its profitability can be described as average. PFG may be a bit undervalued, certainly considering the very reasonable score on growth PFG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year PFG was profitable.
PFG had a positive operating cash flow in the past year.
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 0.50%, PFG is not doing good in the industry: 74.13% of the companies in the same industry are doing better.
With a Return On Equity value of 14.17%, PFG perfoms like the industry average, outperforming 58.74% of the companies in the same industry.
With a Return On Invested Capital value of 0.41%, PFG is not doing good in the industry: 64.34% of the companies in the same industry are doing better.
PFG had an Average Return On Invested Capital over the past 3 years of 0.56%. This is below the industry average of 4.47%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 14.17% | ||
| ROIC | 0.41% |
ROA(3y)0.78%
ROA(5y)0.67%
ROE(3y)22.52%
ROE(5y)17.16%
ROIC(3y)0.56%
ROIC(5y)0.55%
1.3 Margins
Looking at the Profit Margin, with a value of 10.02%, PFG is in the better half of the industry, outperforming 62.24% of the companies in the same industry.
PFG's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 9.39%, PFG perfoms like the industry average, outperforming 44.06% of the companies in the same industry.
PFG's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.39% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A |
OM growth 3Y-12.61%
OM growth 5Y-2.51%
PM growth 3Y-3.3%
PM growth 5Y3.17%
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), PFG is destroying value.
The number of shares outstanding for PFG has been reduced compared to 1 year ago.
PFG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PFG has about the same debt to assets ratio.
2.2 Solvency
PFG has a debt to FCF ratio of 0.91. This is a very positive value and a sign of high solvency as it would only need 0.91 years to pay back of all of its debts.
PFG has a Debt to FCF ratio of 0.91. This is in the better half of the industry: PFG outperforms 65.73% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that PFG is not too dependend on debt financing.
The Debt to Equity ratio of PFG (0.37) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC7.88%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
PFG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.09%.
Measured over the past 5 years, PFG shows a small growth in Earnings Per Share. The EPS has been growing by 4.54% on average per year.
The Revenue has been growing slightly by 6.30% in the past year.
The Revenue has been decreasing by -0.73% on average over the past years.
EPS 1Y (TTM)6.09%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%9.7%
Revenue 1Y (TTM)6.3%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%5.48%
3.2 Future
The Earnings Per Share is expected to grow by 12.70% on average over the next years. This is quite good.
PFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.15% yearly.
EPS Next Y18.29%
EPS Next 2Y14.15%
EPS Next 3Y12.93%
EPS Next 5Y12.7%
Revenue Next Year3.89%
Revenue Next 2Y4.11%
Revenue Next 3Y4.16%
Revenue Next 5Y5.15%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.76, the valuation of PFG can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 64.34% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.22, PFG is valued rather cheaply.
PFG is valuated reasonably with a Price/Forward Earnings ratio of 8.45.
PFG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PFG is cheaper than 68.53% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.86, PFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 8.45 |
4.2 Price Multiples
63.64% 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 75.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.81 | ||
| EV/EBITDA | 7.6 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as PFG's earnings are expected to grow with 12.93% in the coming years.
PEG (NY)0.59
PEG (5Y)2.37
EPS Next 2Y14.15%
EPS Next 3Y12.93%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 4.10%, which is a nice return.
Compared to an average industry Dividend Yield of 3.23, PFG pays a better dividend. On top of this PFG pays more dividend than 81.12% of the companies listed in the same industry.
PFG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.1% |
5.2 History
The dividend of PFG has a limited annual growth rate of 5.52%.
PFG has paid a dividend for at least 10 years, which is a reliable track record.
PFG has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.52%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
41.91% of the earnings are spent on dividend by PFG. This is a bit on the high side, but may be sustainable.
PFG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.91%
EPS Next 2Y14.15%
EPS Next 3Y12.93%
76.83
+2.76 (+3.73%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.47%
Inst Owner Change0.34%
Ins Owners1.03%
Ins Owner Change7.14%
Market Cap17.28B
Analysts67.78
Price Target83.08 (8.13%)
Short Float %2.98%
Short Ratio3.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.1% |
Yearly Dividend2.85
Dividend Growth(5Y)5.52%
DP41.91%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.17%
Min EPS beat(2)-13.6%
Max EPS beat(2)-0.73%
EPS beat(4)0
Avg EPS beat(4)-8.08%
Min EPS beat(4)-13.6%
Max EPS beat(4)-0.73%
EPS beat(8)2
Avg EPS beat(8)-3.88%
EPS beat(12)6
Avg EPS beat(12)1.3%
EPS beat(16)10
Avg EPS beat(16)3.48%
Revenue beat(2)0
Avg Revenue beat(2)-5.89%
Min Revenue beat(2)-7.1%
Max Revenue beat(2)-4.67%
Revenue beat(4)2
Avg Revenue beat(4)-0.76%
Min Revenue beat(4)-7.1%
Max Revenue beat(4)6.25%
Revenue beat(8)5
Avg Revenue beat(8)2.69%
Revenue beat(12)8
Avg Revenue beat(12)2.66%
Revenue beat(16)9
Avg Revenue beat(16)-0.07%
PT rev (1m)-6.64%
PT rev (3m)-7.82%
EPS NQ rev (1m)-3.85%
EPS NQ rev (3m)-4.18%
EPS NY rev (1m)-2.79%
EPS NY rev (3m)-2.66%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-1.75%
Revenue NY rev (3m)-2.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 8.45 | ||
| P/S | 1.1 | ||
| P/FCF | 3.81 | ||
| P/OCF | 3.76 | ||
| P/B | 1.56 | ||
| P/tB | 2.12 | ||
| EV/EBITDA | 7.6 |
EPS(TTM)7.14
EY9.29%
EPS(NY)9.1
Fwd EY11.84%
FCF(TTM)20.15
FCFY26.23%
OCF(TTM)20.46
OCFY26.63%
SpS69.7
BVpS49.28
TBVpS36.21
PEG (NY)0.59
PEG (5Y)2.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 14.17% | ||
| ROCE | 0.47% | ||
| ROIC | 0.41% | ||
| ROICexc | 0.42% | ||
| ROICexgc | 1.15% | ||
| OM | 9.39% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A | ||
| FCFM | 28.92% |
ROA(3y)0.78%
ROA(5y)0.67%
ROE(3y)22.52%
ROE(5y)17.16%
ROIC(3y)0.56%
ROIC(5y)0.55%
ROICexc(3y)0.57%
ROICexc(5y)0.56%
ROICexgc(3y)1.58%
ROICexgc(5y)1.52%
ROCE(3y)0.64%
ROCE(5y)0.63%
ROICexcg growth 3Y-8.99%
ROICexcg growth 5Y-5.01%
ROICexc growth 3Y-10.54%
ROICexc growth 5Y-5.59%
OM growth 3Y-12.61%
OM growth 5Y-2.51%
PM growth 3Y-3.3%
PM growth 5Y3.17%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Debt/EBITDA | 1.9 | ||
| Cap/Depr | 10.01% | ||
| Cap/Sales | 0.44% | ||
| Interest Coverage | 8.65 | ||
| Cash Conversion | 213.13% | ||
| Profit Quality | 288.61% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC7.88%
ROIC/WACC0.05
Cap/Depr(3y)13.6%
Cap/Depr(5y)15.82%
Cap/Sales(3y)0.66%
Cap/Sales(5y)0.72%
Profit Quality(3y)315.01%
Profit Quality(5y)280.11%
High Growth Momentum
Growth
EPS 1Y (TTM)6.09%
EPS 3Y1.02%
EPS 5Y4.54%
EPS Q2Q%9.7%
EPS Next Y18.29%
EPS Next 2Y14.15%
EPS Next 3Y12.93%
EPS Next 5Y12.7%
Revenue 1Y (TTM)6.3%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%5.48%
Revenue Next Year3.89%
Revenue Next 2Y4.11%
Revenue Next 3Y4.16%
Revenue Next 5Y5.15%
EBIT growth 1Y-20.56%
EBIT growth 3Y-9.8%
EBIT growth 5Y-3.23%
EBIT Next Year17.86%
EBIT Next 3Y9.62%
EBIT Next 5YN/A
FCF growth 1Y22.86%
FCF growth 3Y13.65%
FCF growth 5Y-3.29%
OCF growth 1Y21.37%
OCF growth 3Y12.66%
OCF growth 5Y-3.47%