LSE:PRU

Stock Analysis Report

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Executive Summary

Prudential plc, through its subsidiaries, provides a range of long-term savings and protection products in Asia, the United States, and Africa. More Details


Snowflake Analysis

Average dividend payer with mediocre balance sheet.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.9%

PRU

-1.5%

GB Insurance

-0.7%

GB Market


1 Year Return

-24.1%

PRU

-21.7%

GB Insurance

-16.4%

GB Market

Return vs Industry: PRU underperformed the UK Insurance industry which returned -20.3% over the past year.

Return vs Market: PRU underperformed the UK Market which returned -15.4% over the past year.


Shareholder returns

PRUIndustryMarket
7 Day-3.9%-1.5%-0.7%
30 Day-4.8%-0.7%0.7%
90 Day-9.0%-4.7%-3.2%
1 Year-22.3%-24.1%-18.7%-21.7%-13.2%-16.4%
3 Year-27.2%-42.9%-20.9%-34.9%-9.3%-20.5%
5 Year-6.3%-30.9%-1.1%-26.9%15.2%-10.7%

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?

42.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRU (£10.56) is trading below our estimate of fair value (£18.22)

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 (27.3x) compared to the GB Insurance industry average (14.4x).

PE vs Market: PRU is poor value based on its PE Ratio (27.3x) compared to the UK market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: PRU is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: PRU is overvalued based on its PB Ratio (1.9x) compared to the GB Insurance industry average (1.1x).


Next Steps

Future Growth

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

11.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRU's forecast earnings growth (11.9% per year) is above the savings rate (1.2%).

Earnings vs Market: PRU's earnings (11.9% per year) are forecast to grow slower than the UK market (24.1% per year).

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

Revenue vs Market: PRU's revenue (10.9% per year) is forecast to grow faster than the UK market (6% per year).

High Growth Revenue: PRU's revenue (10.9% per year) is forecast to grow slower than 20% 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 (17.7%).


Next Steps

Past Performance

How has Prudential performed over the past 5 years?

-12.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRU has high quality earnings.

Growing Profit Margin: PRU's current net profit margins (3.7%) are higher than last year (3.5%).


Past Earnings Growth Analysis

Earnings Trend: PRU's earnings have declined by 12.1% 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 (-45.9%) over the past year, making it difficult to compare to the Insurance industry average (-7.6%).


Return on Equity

High ROE: PRU's Return on Equity (6.9%) is considered low.


Next Steps

Financial Health

How is Prudential's financial position?


Financial Position Analysis

Short Term Liabilities: PRU's short term assets ($62.3B) exceed its short term liabilities ($27.7B).

Long Term Liabilities: PRU's short term assets ($62.3B) do not cover its long term liabilities ($416.2B).


Debt to Equity History and Analysis

Debt Level: PRU's debt to equity ratio (88.8%) is considered high.

Reducing Debt: PRU's debt to equity ratio has reduced from 97.1% to 88.8% over the past 5 years.

Debt Coverage: PRU's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: PRU's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet


Next Steps

Dividend

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

2.28%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PRU's dividend (2.28%) is higher than the bottom 25% of dividend payers in the UK market (1.81%).

High Dividend: PRU's dividend (2.28%) is low compared to the top 25% of dividend payers in the UK market (5.24%).


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 (62.3%), 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 thoroughly covered by earnings (11.7% payout ratio).


Next Steps

Management

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

2.5yrs

Average management tenure


CEO

Mike Wells (59 yo)

5.33yrs

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 ($USD11.58M) is above average for companies of similar size in the UK market ($USD4.90M).

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 Director5.33yrsUS$6.72m0.066%
$ 18.1m
Mark FitzPatrick
Group CFO3.25yrsUS$3.46m0.0045%
$ 1.2m
Stuart Turner
Group Chief Risk & Compliance Officer and Executive Director2.58yrsUS$2.54m0.0037%
$ 1.0m
Nicolaos Nicandrou
Chief Executive of Prudential Corporation Asia3.25yrsUS$2.29m0.016%
$ 4.5m
Michael Falcon
Chairman & CEO of Jackson Holdings LLC1.75yrsUS$6.60m0.0020%
$ 548.5k
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%
$ 274.3k
Jonathan Oliver
Group Communications Directorno datano data0.0011%
$ 307.2k
Jolene Chen
Group Human Resources Director1.33yrsno datano data
Allen Thai
Chief Representative of Myanmar Officeno datano datano data
Ciaran Mulligan
Head of Manager Oversight for Portfolio Management Groupno datano datano data

2.5yrs

Average Tenure

56yo

Average Age

Experienced Management: PRU's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Wells
Group Chief Executive & Executive Director5.33yrsUS$6.72m0.066%
$ 18.1m
Mark FitzPatrick
Group CFO3.25yrsUS$3.46m0.0045%
$ 1.2m
Stuart Turner
Group Chief Risk & Compliance Officer and Executive Director2.58yrsUS$2.54m0.0037%
$ 1.0m
Michael Falcon
Chairman & CEO of Jackson Holdings LLC1.75yrsUS$6.60m0.0020%
$ 548.5k
Thomas Watjen
Independent Non-Executive Director3.25yrsUS$173.00k0.00080%
$ 219.4k
Paul Victor Sant Manduca
Independent Chairman of the Board8.25yrsUS$930.00k0.0016%
$ 449.8k
Anthony John Nightingale
Independent Non-Executive Director7.33yrsUS$174.00k0.0019%
$ 526.6k
Alice Schroeder
Independent Non-Executive Director7.33yrsUS$158.00k0.0011%
$ 307.2k
Kaikhushru Shiavax Nargolwala
Independent Non-Executive Director8.75yrsUS$173.00k0.0027%
$ 737.8k
Philip Remnant
Senior Independent Director7.75yrsUS$222.00k0.00030%
$ 82.3k
Jeremy Anderson
Independent Non-Executive Director0.75yrno data0.00035%
$ 96.0k
David John Law
Independent Non-Executive Director5.08yrsUS$217.00k0.00035%
$ 96.0k

6.2yrs

Average Tenure

62.5yo

Average Age

Experienced Board: PRU's board of directors are considered experienced (6.2 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: PRU 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£27.427b
  • 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)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
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 long-term savings and protection products in Asia, the United States, and Africa. The company offers health and protection, as well as savings ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/26 20:50
End of Day Share Price2020/10/26 00:00
Earnings2020/06/30
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.