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 may be in some trouble as it scores bad on both profitability and health. PRU has a valuation in line with the averages, but on the other hand it scores bad on growth. 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.
The reported net income has been mixed in the past 5 years: PRU reported negative net income in multiple years.
PRU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PRU (0.31%) is worse than 74.83% of its industry peers.
PRU has a Return On Equity of 7.59%. This is in the lower half of the industry: PRU underperforms 62.94% of its industry peers.
The Return On Invested Capital of PRU (0.31%) is worse than 66.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.31% | ||
| ROE | 7.59% | ||
| ROIC | 0.31% |
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 (3.96%) than 68.53% of its industry peers.
PRU's Profit Margin has declined in the last couple of years.
PRU's Operating Margin of 4.78% is on the low side compared to the rest of the industry. PRU is outperformed by 77.62% of its industry peers.
In the last couple of years the Operating Margin of PRU has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.78% | ||
| PM (TTM) | 3.96% | ||
| 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
PRU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, PRU has less shares outstanding
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 28.89, which is on the high side as it means it would take PRU, 28.89 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 28.89, PRU is doing worse than 81.82% of the companies in the same industry.
PRU has a Debt/Equity ratio of 0.72. This is a neutral value indicating PRU is somewhat dependend on debt financing.
PRU has a Debt to Equity ratio of 0.72. This is amonst the worse of the industry: PRU underperforms 85.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 28.89 | ||
| 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 8.61%, which is quite good.
PRU shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.07% yearly.
PRU shows a decrease in Revenue. In the last year, the revenue decreased by -0.67%.
Measured over the past years, PRU shows a small growth in Revenue. The Revenue has been growing by 0.36% on average per year.
EPS 1Y (TTM)8.61%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%5.45%
Revenue 1Y (TTM)-0.67%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-38.19%
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.
PRU is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.53% yearly.
EPS Next Y6.49%
EPS Next 2Y7.25%
EPS Next 3Y7.14%
EPS Next 5Y-0.51%
Revenue Next Year-18.45%
Revenue Next 2Y-7.78%
Revenue Next 3Y-1.17%
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.
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
With a Price/Earnings ratio of 7.92, the valuation of PRU can be described as very cheap.
Based on the Price/Earnings ratio, PRU is valued a bit cheaper than the industry average as 76.22% of the companies are valued more expensively.
PRU's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.25.
The Price/Forward Earnings ratio is 6.97, which indicates a rather cheap valuation of PRU.
Based on the Price/Forward Earnings ratio, PRU is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PRU to the average of the S&P500 Index (22.15), we can say PRU is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 6.97 |
4.2 Price Multiples
PRU's Enterprise Value to EBITDA ratio is in line with the industry average.
PRU's Price/Free Cash Flow ratio is rather expensive when compared to the industry. PRU is more expensive than 80.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.45 | ||
| EV/EBITDA | 13.69 |
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)1.22
PEG (5Y)3.83
EPS Next 2Y7.25%
EPS Next 3Y7.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.18%, PRU is a good candidate for dividend investing.
PRU's Dividend Yield is rather good when compared to the industry average which is at 3.23. PRU pays more dividend than 85.31% of the companies in the same industry.
PRU's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.18% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.51%
Div Incr Years16
Div Non Decr Years16
5.3 Sustainability
PRU pays out 83.73% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of PRU has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP83.73%
EPS Next 2Y7.25%
EPS Next 3Y7.14%
103.89
-0.44 (-0.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners61.12%
Inst Owner Change-0.09%
Ins Owners0.12%
Ins Owner Change7.23%
Market Cap36.78B
Analysts67.62
Price Target115.52 (11.19%)
Short Float %1.91%
Short Ratio3.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.18% |
Yearly Dividend5.3
Dividend Growth(5Y)5.51%
DP83.73%
Div Incr Years16
Div Non Decr Years16
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.67%
Min EPS beat(2)-9.72%
Max EPS beat(2)2.38%
EPS beat(4)1
Avg EPS beat(4)-2.76%
Min EPS beat(4)-9.72%
Max EPS beat(4)2.38%
EPS beat(8)2
Avg EPS beat(8)-1.11%
EPS beat(12)3
Avg EPS beat(12)-3.75%
EPS beat(16)7
Avg EPS beat(16)3.89%
Revenue beat(2)0
Avg Revenue beat(2)-9.7%
Min Revenue beat(2)-12.43%
Max Revenue beat(2)-6.96%
Revenue beat(4)2
Avg Revenue beat(4)2.85%
Min Revenue beat(4)-12.43%
Max Revenue beat(4)29.51%
Revenue beat(8)3
Avg Revenue beat(8)4.39%
Revenue beat(12)5
Avg Revenue beat(12)5.78%
Revenue beat(16)8
Avg Revenue beat(16)9.23%
PT rev (1m)-9.76%
PT rev (3m)-10.36%
EPS NQ rev (1m)-2.93%
EPS NQ rev (3m)-5.46%
EPS NY rev (1m)-0.84%
EPS NY rev (3m)-4.1%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)-2.9%
Revenue NY rev (1m)-2.53%
Revenue NY rev (3m)-5.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.92 | ||
| Fwd PE | 6.97 | ||
| P/S | 0.64 | ||
| P/FCF | 47.45 | ||
| P/OCF | 47.45 | ||
| P/B | 1.23 | ||
| P/tB | 1.23 | ||
| EV/EBITDA | 13.69 |
EPS(TTM)13.12
EY12.63%
EPS(NY)14.9
Fwd EY14.34%
FCF(TTM)2.19
FCFY2.11%
OCF(TTM)2.19
OCFY2.11%
SpS161.84
BVpS84.42
TBVpS84.42
PEG (NY)1.22
PEG (5Y)3.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.31% | ||
| ROE | 7.59% | ||
| ROCE | 0.37% | ||
| ROIC | 0.31% | ||
| ROICexc | 0.31% | ||
| ROICexgc | 0.48% | ||
| OM | 4.78% | ||
| PM (TTM) | 3.96% | ||
| GM | N/A | ||
| FCFM | 1.35% |
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-Score6
Asset Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 28.89 | ||
| Debt/EBITDA | 6.89 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 24.82% | ||
| Profit Quality | 34.17% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score6
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)8.61%
EPS 3Y-4.48%
EPS 5Y2.07%
EPS Q2Q%5.45%
EPS Next Y6.49%
EPS Next 2Y7.25%
EPS Next 3Y7.14%
EPS Next 5Y-0.51%
Revenue 1Y (TTM)-0.67%
Revenue growth 3Y-2.22%
Revenue growth 5Y0.36%
Sales Q2Q%-38.19%
Revenue Next Year-18.45%
Revenue Next 2Y-7.78%
Revenue Next 3Y-1.17%
Revenue Next 5Y-1.53%
EBIT growth 1Y-1.9%
EBIT growth 3Y-35.38%
EBIT growth 5Y-9.89%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-87.37%
FCF growth 3Y-4.66%
FCF growth 5Y-15.41%
OCF growth 1Y-87.37%
OCF growth 3Y-4.66%
OCF growth 5Y-15.41%