PRUDENTIAL FINANCIAL INC (PRU) Stock Fundamental Analysis
NYSE:PRU - New York Stock Exchange, Inc. - US7443201022 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to PRU. PRU was compared to 143 industry peers in the Insurance industry. PRU has a bad profitability rating. Also its financial health evaluation is rather negative. PRU has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally 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.
The reported net income has been mixed in the past 5 years: PRU reported negative net income in multiple years.
In the past 5 years PRU always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.37%, PRU is doing worse than 76.92% of the companies in the same industry.
PRU has a Return On Equity (9.67%) which is in line with its industry peers.
PRU's Return On Invested Capital of 0.36% is on the low side compared to the rest of the industry. PRU is outperformed by 67.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.37% | ||
| ROE | 9.67% | ||
| ROIC | 0.36% |
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 Profit Margin of 4.05%. This is in the lower half of the industry: PRU underperforms 72.03% of its industry peers.
In the last couple of years the Profit Margin of PRU has declined.
PRU has a Operating Margin of 4.83%. This is in the lower half of the industry: PRU underperforms 77.62% of its industry peers.
PRU's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.83% | ||
| PM (TTM) | 4.05% | ||
| GM | N/A |
OM growth 3Y-33.92%
OM growth 5Y-10.21%
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.
PRU has less shares outstanding than it did 1 year ago.
PRU has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PRU is higher compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of PRU is 2.54, which is a good value as it means it would take PRU, 2.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.54, PRU is in line with its industry, outperforming 44.76% of the companies in the same industry.
PRU has a Debt/Equity ratio of 0.76. This is a neutral value indicating PRU is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.76, PRU is doing worse than 84.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 2.54 | ||
| Altman-Z | N/A |
ROIC/WACC0.04
WACC8.56%
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 11.45%, which is quite good.
The Earnings Per Share has been growing slightly by 2.07% on average over the past years.
The Revenue has decreased by -6.36% in the past year.
PRU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.36% yearly.
EPS 1Y (TTM)11.45%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%14.73%
Revenue 1Y (TTM)-6.36%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-0.08%
3.2 Future
PRU is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.51% yearly.
The Revenue is expected to decrease by -1.53% on average over the next years.
EPS Next Y7.4%
EPS Next 2Y7.5%
EPS Next 3Y7.48%
EPS Next 5Y-0.51%
Revenue Next Year-15.32%
Revenue Next 2Y-6.51%
Revenue Next 3Y-2.16%
Revenue Next 5Y-1.53%
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 decreasing.
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 8.03, the valuation of PRU can be described as very reasonable.
Based on the Price/Earnings ratio, PRU is valued a bit cheaper than 75.52% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.92, PRU is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.48, the valuation of PRU can be described as very cheap.
76.22% of the companies in the same industry are more expensive than PRU, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.65. PRU is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 7.48 |
4.2 Price Multiples
PRU's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PRU indicates a somewhat cheap valuation: PRU is cheaper than 72.73% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.34 | ||
| EV/EBITDA | 10.98 |
4.3 Compensation for Growth
PRU's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.09
PEG (5Y)3.88
EPS Next 2Y7.5%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.43%, PRU is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.28, PRU pays a better dividend. On top of this PRU pays more dividend than 86.71% of the companies listed in the same industry.
PRU's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.43% |
5.2 History
The dividend of PRU has a limited annual growth rate of 5.51%.
PRU has been paying a dividend for at least 10 years, so it has 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 70.19% of its income as dividend. This is not a sustainable payout ratio.
PRU's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP70.19%
EPS Next 2Y7.5%
EPS Next 3Y7.48%
104.03
+2.44 (+2.4%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners61.12%
Inst Owner Change0.45%
Ins Owners0.12%
Ins Owner Change6.9%
Market Cap36.87B
Analysts67.62
Price Target128.01 (23.05%)
Short Float %1.77%
Short Ratio3.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.43% |
Yearly Dividend5.3
Dividend Growth(5Y)5.51%
DP70.19%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-5.35%
Min EPS beat(2)-9.72%
Max EPS beat(2)-0.98%
EPS beat(4)0
Avg EPS beat(4)-3.69%
Min EPS beat(4)-9.72%
Max EPS beat(4)-0.98%
EPS beat(8)1
Avg EPS beat(8)-2.67%
EPS beat(12)3
Avg EPS beat(12)-2.6%
EPS beat(16)7
Avg EPS beat(16)6.7%
Revenue beat(2)1
Avg Revenue beat(2)8.54%
Min Revenue beat(2)-12.43%
Max Revenue beat(2)29.51%
Revenue beat(4)3
Avg Revenue beat(4)16.65%
Min Revenue beat(4)-12.43%
Max Revenue beat(4)48.21%
Revenue beat(8)4
Avg Revenue beat(8)7.17%
Revenue beat(12)6
Avg Revenue beat(12)7.64%
Revenue beat(16)10
Avg Revenue beat(16)12.53%
PT rev (1m)0%
PT rev (3m)-4.86%
EPS NQ rev (1m)-5.34%
EPS NQ rev (3m)-9.51%
EPS NY rev (1m)-3.28%
EPS NY rev (3m)-6.54%
Revenue NQ rev (1m)-2.77%
Revenue NQ rev (3m)-5.76%
Revenue NY rev (1m)-1.72%
Revenue NY rev (3m)-4.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.03 | ||
| Fwd PE | 7.48 | ||
| P/S | 0.55 | ||
| P/FCF | 4.34 | ||
| P/OCF | 4.34 | ||
| P/B | 1.32 | ||
| P/tB | 1.32 | ||
| EV/EBITDA | 10.98 |
EPS(TTM)12.95
EY12.45%
EPS(NY)13.91
Fwd EY13.37%
FCF(TTM)23.99
FCFY23.06%
OCF(TTM)23.99
OCFY23.06%
SpS187.64
BVpS78.64
TBVpS78.64
PEG (NY)1.09
PEG (5Y)3.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.37% | ||
| ROE | 9.67% | ||
| ROCE | 0.44% | ||
| ROIC | 0.36% | ||
| ROICexc | 0.37% | ||
| ROICexgc | 0.56% | ||
| OM | 4.83% | ||
| PM (TTM) | 4.05% | ||
| GM | N/A | ||
| FCFM | 12.78% |
ROA(3y)0.15%
ROA(5y)0.27%
ROE(3y)4.35%
ROE(5y)5.32%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-28.02%
ROICexcg growth 5Y-7.81%
ROICexc growth 3Y-30.1%
ROICexc growth 5Y-6.51%
OM growth 3Y-33.92%
OM growth 5Y-10.21%
PM growth 3Y-30.9%
PM growth 5Y-8.56%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 2.54 | ||
| Debt/EBITDA | 5.88 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 1.61 | ||
| Cash Conversion | 236.69% | ||
| Profit Quality | 315.59% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score5
WACC8.56%
ROIC/WACC0.04
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.45%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%14.73%
EPS Next Y7.4%
EPS Next 2Y7.5%
EPS Next 3Y7.48%
EPS Next 5Y-0.51%
Revenue 1Y (TTM)-6.36%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-0.08%
Revenue Next Year-15.32%
Revenue Next 2Y-6.51%
Revenue Next 3Y-2.16%
Revenue Next 5Y-1.53%
EBIT growth 1Y-37.03%
EBIT growth 3Y-35.38%
EBIT growth 5Y-9.89%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y30.6%
FCF growth 3Y-4.66%
FCF growth 5Y-15.41%
OCF growth 1Y30.6%
OCF growth 3Y-4.66%
OCF growth 5Y-15.41%