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. While PFG is still in line with the averages on profitability rating, there are concerns on its financial health. PFG has a decent growth rate and is not valued too expensively. Finally PFG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year PFG was profitable.
In the past year PFG had a positive cash flow from operations.
PFG had positive earnings in each of the past 5 years.
Each year in the past 5 years PFG had a positive operating cash flow.
1.2 Ratios
PFG has a Return On Assets of 0.50%. This is in the lower half of the industry: PFG underperforms 72.73% of its industry peers.
PFG's Return On Equity of 14.17% is fine compared to the rest of the industry. PFG outperforms 67.13% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.41%, PFG is doing worse than 64.34% of the companies in the same industry.
PFG had an Average Return On Invested Capital over the past 3 years of 0.56%. This is below the industry average of 4.27%.
| 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
PFG has a Profit Margin of 10.02%. This is in the better half of the industry: PFG outperforms 64.34% of its industry peers.
In the last couple of years the Profit Margin of PFG has grown nicely.
PFG has a Operating Margin (9.39%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of PFG has declined.
| 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.
PFG has about the same debt/assets ratio as last year.
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.
With a decent Debt to FCF ratio value of 0.91, PFG is doing good in the industry, outperforming 66.43% of the companies in the same industry.
PFG has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
PFG has a Debt to Equity ratio (0.37) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC8.11%
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%.
PFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
PFG shows a small growth in Revenue. In the last year, the Revenue has grown by 6.30%.
Measured over the past years, PFG shows a decrease in Revenue. The Revenue has been decreasing by -0.73% on average per year.
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.
The Revenue is expected to grow by 5.15% on average over the next years.
EPS Next Y16.58%
EPS Next 2Y13.97%
EPS Next 3Y12.64%
EPS Next 5Y12.7%
Revenue Next Year4.07%
Revenue Next 2Y4.04%
Revenue Next 3Y4.44%
Revenue Next 5Y5.15%
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 accelerating.
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
With a Price/Earnings ratio of 10.79, the valuation of PFG can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 62.94% of the companies listed in the same industry.
PFG is valuated cheaply when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 8.49, the valuation of PFG can be described as reasonable.
Based on the Price/Forward Earnings ratio, PFG is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
PFG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 8.49 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PFG.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 75.52% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.82 | ||
| EV/EBITDA | 7.94 |
4.3 Compensation for Growth
PFG's 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 12.64% in the coming years.
PEG (NY)0.65
PEG (5Y)2.37
EPS Next 2Y13.97%
EPS Next 3Y12.64%
5. Dividend
5.1 Amount
PFG has a Yearly Dividend Yield of 3.73%. Purely for dividend investing, there may be better candidates out there.
PFG's Dividend Yield is rather good when compared to the industry average which is at 3.17. PFG pays more dividend than 80.42% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PFG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y13.97%
EPS Next 3Y12.64%
77.01
-0.34 (-0.44%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.47%
Inst Owner Change2.71%
Ins Owners1.03%
Ins Owner Change7.14%
Market Cap17.32B
Analysts67.78
Price Target81.51 (5.84%)
Short Float %2.48%
Short Ratio3.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
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)-8.41%
PT rev (3m)-8.33%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.68%
EPS NY rev (1m)-1.45%
EPS NY rev (3m)-3.91%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.44%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)-2.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 8.49 | ||
| P/S | 1.1 | ||
| P/FCF | 3.82 | ||
| P/OCF | 3.76 | ||
| P/B | 1.56 | ||
| P/tB | 2.13 | ||
| EV/EBITDA | 7.94 |
EPS(TTM)7.14
EY9.27%
EPS(NY)9.07
Fwd EY11.77%
FCF(TTM)20.15
FCFY26.17%
OCF(TTM)20.46
OCFY26.57%
SpS69.7
BVpS49.28
TBVpS36.21
PEG (NY)0.65
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
WACC8.11%
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 Y16.58%
EPS Next 2Y13.97%
EPS Next 3Y12.64%
EPS Next 5Y12.7%
Revenue 1Y (TTM)6.3%
Revenue growth 3Y3.21%
Revenue growth 5Y-0.73%
Sales Q2Q%5.48%
Revenue Next Year4.07%
Revenue Next 2Y4.04%
Revenue Next 3Y4.44%
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%