LSE:PRU

Stock Analysis Report

Executive Summary

Prudential plc, through its subsidiaries, provides a range of retail financial products and services, and asset management services in Asia, the United States, the United Kingdom, Europe, and Africa.


Snowflake Analysis

Average dividend payer and fair value.


Similar Companies

Share Price & News

How has Prudential's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PRU's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-10.8%

PRU

-12.6%

GB Insurance

-2.2%

GB Market


1 Year Return

-45.2%

PRU

-38.7%

GB Insurance

-25.9%

GB Market

Return vs Industry: PRU underperformed the UK Insurance industry which returned -34.7% over the past year.

Return vs Market: PRU underperformed the UK Market which returned -25.2% over the past year.


Shareholder returns

PRUIndustryMarket
7 Day-10.8%-12.6%-2.2%
30 Day-28.6%-28.0%-21.7%
90 Day-36.5%-35.9%-29.6%
1 Year-33.7%-45.2%-31.8%-38.7%-22.2%-25.9%
3 Year-29.6%-45.1%-26.9%-39.7%-16.1%-26.6%
5 Year-26.8%-46.4%-21.2%-41.1%-4.6%-26.2%

Price Volatility Vs. Market

How volatile is Prudential's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Prudential undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRU (£9.2) is trading below our estimate of fair value (£30.4)

Significantly Below Fair Value: PRU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PRU is poor value based on its PE Ratio (15x) compared to the Insurance industry average (12.3x).

PE vs Market: PRU is poor value based on its PE Ratio (15x) compared to the UK market (12.4x).


Price to Earnings Growth Ratio

PEG Ratio: PRU is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: PRU is overvalued based on its PB Ratio (1.5x) compared to the GB Insurance industry average (1.2x).


Next Steps

Future Growth

How is Prudential forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

31.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRU's forecast earnings growth (31.2% per year) is above the savings rate (0.5%).

Earnings vs Market: PRU's earnings (31.2% per year) are forecast to grow faster than the UK market (15.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PRU's revenue is expected to decline over the next 3 years (-41.2% per year).

High Growth Revenue: PRU's revenue is forecast to decline over the next 3 years (-41.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PRU's Return on Equity is forecast to be low in 3 years time (18.4%).


Next Steps

Past Performance

How has Prudential performed over the past 5 years?

-5.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRU has a high level of non-cash earnings.

Growing Profit Margin: PRU's current net profit margins (2.1%) are lower than last year (8%).


Past Earnings Growth Analysis

Earnings Trend: PRU's earnings have declined by -5.4% per year over the past 5 years.

Accelerating Growth: PRU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PRU had negative earnings growth (-32.4%) over the past year, making it difficult to compare to the Insurance industry average (4.5%).


Return on Equity

High ROE: PRU's Return on Equity (9.9%) is considered low.


Next Steps

Financial Health

How is Prudential's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: PRU has a low level of unsold assets or inventory.

Debt Coverage by Assets: PRU's debt is covered by short term assets (assets are 1.7x debt).


Financial Institutions Analysis

Asset Level: PRU's level of assets compared to its equity is very high.

Allowance for Bad Loans: Insufficient data to determine if PRU has a sufficient allowance for bad loans.

Low Risk Liabilities: PRU reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if PRU has an acceptable proportion of non-loan assets held.

Low Risk Deposits: PRU has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if PRU has an appropriate level of bad loans.


Next Steps

Dividend

What is Prudential's current dividend yield, its reliability and sustainability?

4.16%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PRU's dividend (4.16%) is higher than the bottom 25% of dividend payers in the UK market (2.68%).

High Dividend: PRU's dividend (4.16%) is low compared to the top 25% of dividend payers in the UK market (7.57%).


Stability and Growth of Payments

Stable Dividend: PRU's dividend payments have been volatile in the past 10 years.

Growing Dividend: PRU's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61.6%), PRU's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PRU's dividends in 3 years are forecast to be well covered by earnings (21% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

Mike Wells (58yo)

4.83s

Tenure

US$6,719,000

Compensation

Mr. Michael Andrew Wells is also known as Mike, has been Group Chief Executive of Prudential Plc (“Prudential”) since June 2015 and has been its Director since 2011. He joined the Prudential Group in 1995  ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD8.23M) is above average for companies of similar size in the UK market ($USD5.46M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Wells
Group Chief Executive & Executive Director4.83yrsUS$6.72m0.060% $14.5m
Stuart Turner
Group Chief Risk & Compliance Officer and Executive Director2.08yrsUS$2.54m0.0031% $741.2k
Nicolaos Nicandrou
Chief Executive of Prudential Corporation Asia2.75yrsUS$2.29m0.011% $2.7m
Michael Falcon
Chairman & CEO of Jackson Holdings LLC1.25yrsUS$6.60m0.0020% $478.2k
Mark FitzPatrick
Group CFO2.75yrsUS$2.26m0.0028% $664.7k
Rebecca Wyatt
Director of Group Financial Accounting & Reportingno datano datano data
Patrick Bowes
Head of Investor Relationsno datano datano data
Alan Porter
Group General Counselno datano data0.0010% $239.1k
Jonathan Oliver
Group Communications Directorno datano data0.0011% $267.8k
Jolene Chen
Group Human Resources Director0.83yrno datano data

2.0yrs

Average Tenure

55yo

Average Age

Experienced Management: PRU's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Wells
Group Chief Executive & Executive Director4.83yrsUS$6.72m0.060% $14.5m
Stuart Turner
Group Chief Risk & Compliance Officer and Executive Director2.08yrsUS$2.54m0.0031% $741.2k
Michael Falcon
Chairman & CEO of Jackson Holdings LLC1.25yrsUS$6.60m0.0020% $478.2k
Mark FitzPatrick
Group CFO2.75yrsUS$2.26m0.0028% $664.7k
Paul Victor Sant Manduca
Independent Chairman of the Board7.75yrsUS$930.00k0.0016% $392.1k
Anthony John Liddell Nightingale
Independent Non-Executive Director6.83yrsUS$174.00k0.0019% $459.1k
Kaikhushru Shiavax Nargolwala
Independent Non-Executive Director8.25yrsUS$173.00k0.0027% $643.2k
Howard Davies
Independent Non-Executive Director9.5yrsUS$217.00k0.00038% $90.9k
Philip Remnant
Senior Independent Director7.25yrsUS$222.00k0.00027% $64.6k
David John Law
Independent Non-Executive Director4.58yrsUS$217.00k0.00035% $83.7k

7.0yrs

Average Tenure

61.5yo

Average Age

Experienced Board: PRU's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Prudential plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Prudential plc
  • Ticker: PRU
  • Exchange: LSE
  • Founded: 1848
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: UK£23.910b
  • Shares outstanding: 2.60b
  • Website: https://www.prudentialplc.com

Number of Employees


Location

  • Prudential plc
  • 1 Angel Court
  • London
  • Greater London
  • EC2R 7AG
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PUKNYSE (New York Stock Exchange)ADRUSUSDMar 1991
PUK NBMV (Bolsa Mexicana de Valores)ADRMXMXNMar 1991
PRU2DB (Deutsche Boerse AG)ADRDEEURMar 1991
PUKP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
PRULSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
PRUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
PRUXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1992
2378SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
K6SSGX (Singapore Exchange)YesOrdinary SharesSGUSDJan 1992
PRULBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
PUK.PRNYSE (New York Stock Exchange)6.75% PERP SUBUSUSDAug 2004

Biography

Prudential plc, through its subsidiaries, provides a range of retail financial products and services, and asset management services in Asia, the United States, the United Kingdom, Europe, and Africa. The company offers health and protection, as well as other life insurance products, including participating business; mutual funds; and personal lines property and casualty insurance, group insurance, and institutional fund management services. It also provides fixed annuities, such as fixed interest rate, and fixed index and immediate annuities; variable annuities; institutional products comprising guaranteed investment contracts and funding agreements; and savings and investment products. In addition, the company offers long-term products, which include pension products and annuities; conventional annuities, including level, fixed increase, and RPI annuities; onshore and offshore bonds; corporate, individual pension, and income drawdown products; and investment funds. Prudential plc provides its products and services through an agency sales force together with various banks, brokers, local partners, independent insurance agents, independent broker-dealers, regional broker-dealers, wirehouses, credit unions, and other financial institutions. The company was founded in 1848 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 21:06
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.