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

Fundamentals

Established 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


Market Performance


7 Day Return

-4.9%

PRU

-1.6%

GB Insurance

0.08%

GB Market


1 Year Return

-6.7%

PRU

-1.3%

GB Insurance

3.5%

GB Market

Return vs Industry: PRU underperformed the UK Insurance industry which returned -1.3% over the past year.

Return vs Market: PRU underperformed the UK Market which returned 3.5% over the past year.


Shareholder returns

PRUIndustryMarket
7 Day-4.9%-1.6%0.08%
30 Day-4.3%-0.4%-1.3%
90 Day-18.3%-8.8%-2.2%
1 Year12.9%-6.7%9.9%-1.3%9.0%3.5%
3 Year27.8%0.07%23.6%0.5%18.1%3.1%
5 Year36.8%0.9%39.8%3.9%36.2%5.3%

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?

45.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRU (£14.04) is trading below our estimate of fair value (£25.79)

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 (13.8x) compared to the Insurance industry average (13.8x).

PE vs Market: PRU is good value based on its PE Ratio (13.8x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: PRU is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: PRU is overvalued based on its PB Ratio (1.8x) compared to the GB Insurance industry average (1.7x).


Next Steps

Future Growth

How is Prudential forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRU's forecast earnings growth (9.1% per year) is above the savings rate (1.2%).

Earnings vs Market: PRU's earnings (9.1% per year) are forecast to grow slower than the UK market (12.4% per year).

High Growth Earnings: PRU's earnings are forecast to grow, but not significantly.

Revenue vs Market: PRU's revenue is expected to decline over the next 3 years (-12% per year).

High Growth Revenue: PRU's revenue is forecast to decline over the next 3 years (-12% 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 (18.9%).


Next Steps

Past Performance

How has Prudential performed over the past 5 years?

3.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: PRU's earnings have grown by 3.9% per year over the past 5 years.

Accelerating Growth: PRU's earnings growth over the past year (21.9%) exceeds its 5-year average (3.9% per year).

Earnings vs Industry: PRU earnings growth over the past year (21.9%) underperformed the Insurance industry 21.9%.


Return on Equity

High ROE: PRU's Return on Equity (13.4%) is considered low.


Return on Assets

ROA vs Industry: PRU's Return on Assets is below or equal to the Insurance industry average last year.


Return on Capital Employed

ROCE Improving: PRU has significantly improved its Return on Capital Employed over the past 3 years.


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 15.309760x 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?

3.52%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%2.0%markettop25%5.4%industryaverage5.1%forecastin3Years3.4%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: PRU's dividend (3.52%) is higher than the bottom 25% of dividend payers in the UK market (1.98%).

High Dividend: PRU's dividend (3.52%) is low compared to the top 25% of dividend payers in the UK market (5.37%).

Stable Dividend: PRU's dividends per share have been stable 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 reasonably low payout ratio (49.2%), PRU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PRU's dividends in 3 years are forecast to be well covered by earnings (28% payout ratio).


Next Steps

Management

What is the CEO of Prudential's salary, the management and board of directors tenure and is there insider trading?

0.8yrs

Average management tenure


CEO

Mike Wells (58yo)

4.3yrs

Tenure

UK£7,434,000

Compensation

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


CEO Compensation Analysis

Compensation vs. Market: Mike's total compensation ($USD9.63M) is about average for companies of similar size in the UK market ($USD4.96M).

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


Management Age and Tenure

0.8yrs

Average Tenure

54yo

Average Age

Experienced Management: PRU's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

6.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: PRU's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

Insider Buying: PRU insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£347,18709 Oct 19
Stuart Turner
EntityIndividual
Role
Member of the Board of Directors
Group Chief Risk & Compliance Officer and Executive Director
Shares25,000
Max PriceUK£13.89
BuyUK£13,80504 Oct 19
Jane Wicker-Miurin
EntityIndividual
Shares1,000
Max PriceUK£13.81

Ownership Breakdown


Management Team

  • Alan Porter

    Group General Counsel

    • Tenure: 0yrs
  • Mike Wells (58yo)

    Group Chief Executive & Executive Director

    • Tenure: 4.3yrs
    • Compensation: UK£7.43m
  • Barry Stowe (61yo)

    • Tenure: 0.8yrs
    • Compensation: UK£8.85m
  • Nic Nicandrou (54yo)

    • Tenure: 0.4yrs
    • Compensation: UK£4.80m
  • Patrick Bowes

    Head of Investor Relations

    • Tenure: 0yrs
  • Jolene Chen

    Group Human Resources Director

    • Tenure: 0.8yrs
  • Jonathan Oliver

    Group Communications Director

    • Tenure: 0yrs
  • Rebecca Wyatt

    Head of Financial Accounting & Reporting

    • Tenure: 0yrs
  • Mark FitzPatrick (51yo)

    Group CFO

    • Tenure: 2.3yrs
    • Compensation: UK£2.26m
  • Stuart Turner (50yo)

    Group Chief Risk & Compliance Officer and Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£2.06m

Board Members

  • Paul Victor Sant Manduca (67yo)

    Independent Chairman of the Board

    • Tenure: 7.3yrs
    • Compensation: UK£878.00k
  • Anthony John Liddell Nightingale (72yo)

    Independent Non-Executive Director

    • Tenure: 6.3yrs
    • Compensation: UK£168.00k
  • Kai Nargolwala (69yo)

    Independent Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£155.00k
  • Howard Davies (68yo)

    Independent Non-Executive Director

    • Tenure: 9yrs
    • Compensation: UK£212.00k
  • Philip Remnant (64yo)

    Senior Independent Director

    • Tenure: 6.8yrs
    • Compensation: UK£216.00k
  • Mike Wells (58yo)

    Group Chief Executive & Executive Director

    • Tenure: 4.3yrs
    • Compensation: UK£7.43m
  • Michael Falcon (57yo)

    • Tenure: 0.8yrs
  • David John Law (59yo)

    Independent Non-Executive Director

    • Tenure: 4.1yrs
    • Compensation: UK£212.00k
  • Mark FitzPatrick (51yo)

    Group CFO

    • Tenure: 2.3yrs
    • Compensation: UK£2.26m
  • Stuart Turner (50yo)

    Group Chief Risk & Compliance Officer and Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£2.06m

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£36.327b
  • Shares outstanding: 2.59b
  • Website: https://www.prudential.co.uk

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)ADR EACH REPR 2 ORD GBP0.05USUSDMar 1991
PUK NBMV (Bolsa Mexicana de Valores)ADR EACH REPR 2 ORD GBP0.05MXMXNMar 1991
PRU2DB (Deutsche Boerse AG)ADR EACH REPR 2 ORD GBP0.05DEEURMar 1991
PUKP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
PRULSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
PRUDB (Deutsche Boerse AG)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 c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 20:35
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.