PRINCIPAL FINANCIAL GROUP (PFG) Stock Fundamental Analysis
NASDAQ:PFG - Nasdaq - US74251V1026 - Common Stock - Currency: USD
Taking everything into account, PFG scores 4 out of 10 in our fundamental rating. PFG was compared to 143 industry peers in the Insurance industry. PFG has a medium profitability rating, but doesn't score so well on its financial health evaluation. PFG may be a bit undervalued, certainly considering the very reasonable score on growth Finally PFG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PFG had positive earnings in the past year.
PFG had a positive operating cash flow in the past year.
Each year in the past 5 years PFG has been profitable.
In the past 5 years PFG always reported a positive cash flow from operatings.
1.2 Ratios
PFG has a Return On Assets of 0.50%. This is in the lower half of the industry: PFG underperforms 74.13% of its industry peers.
The Return On Equity of PFG (14.17%) is comparable to the rest of the industry.
The Return On Invested Capital of PFG (0.41%) is worse than 64.34% of its industry peers.
PFG had an Average Return On Invested Capital over the past 3 years of 0.56%. This is below the industry average of 4.49%.
| 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's Profit Margin of 10.02% is fine compared to the rest of the industry. PFG outperforms 62.24% 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 in line with its industry peers.
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.
Compared to 1 year ago, PFG has less shares outstanding
The number of shares outstanding for PFG has been reduced compared to 5 years ago.
Compared to 1 year ago, PFG has about the same debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of PFG is 0.91, which is an excellent value as it means it would take PFG, only 0.91 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PFG (0.91) is better than 65.73% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that PFG is not too dependend on debt financing.
PFG's Debt to Equity ratio of 0.37 is in line compared to the rest of the industry. PFG outperforms 44.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 0.91 | ||
| Altman-Z | N/A |
ROIC/WACC0.05
WACC7.87%
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 been growing slightly by 6.09% over the past year.
PFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
Looking at the last year, PFG shows a small growth in Revenue. The Revenue has grown by 6.30% in the last 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
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
Based on the Price/Earnings ratio of 10.29, the valuation of PFG can be described as reasonable.
62.94% of the companies in the same industry are more expensive than PFG, based on the Price/Earnings ratio.
PFG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.78.
Based on the Price/Forward Earnings ratio of 8.08, the valuation of PFG can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PFG indicates a somewhat cheap valuation: PFG is cheaper than 71.33% of the companies listed in the same industry.
PFG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.29 | ||
| Fwd PE | 8.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PFG is valued a bit cheaper than 63.64% of the companies in the same industry.
75.52% of the companies in the same industry are more expensive than PFG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.64 | ||
| EV/EBITDA | 7.53 |
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)0.56
PEG (5Y)2.27
EPS Next 2Y14.15%
EPS Next 3Y12.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.00%, PFG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.21, PFG pays a better dividend. On top of this PFG pays more dividend than 81.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.46, PFG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4% |
5.2 History
The dividend of PFG has a limited annual growth rate of 5.52%.
PFG has been paying a dividend for at least 10 years, so it has 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
PFG pays out 41.91% of its income as dividend. 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%
73.46
-1.54 (-2.05%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners72.47%
Inst Owner Change-29.33%
Ins Owners1.03%
Ins Owner Change7.14%
Market Cap16.53B
Analysts67.37
Price Target83.08 (13.1%)
Short Float %2.58%
Short Ratio3.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4% |
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 | 10.29 | ||
| Fwd PE | 8.08 | ||
| P/S | 1.05 | ||
| P/FCF | 3.64 | ||
| P/OCF | 3.59 | ||
| P/B | 1.49 | ||
| P/tB | 2.03 | ||
| EV/EBITDA | 7.53 |
EPS(TTM)7.14
EY9.72%
EPS(NY)9.1
Fwd EY12.38%
FCF(TTM)20.15
FCFY27.44%
OCF(TTM)20.46
OCFY27.85%
SpS69.7
BVpS49.28
TBVpS36.21
PEG (NY)0.56
PEG (5Y)2.27
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
WACC7.87%
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%