NasdaqGS:PFG

Stock Analysis Report

Principal Financial Group

Executive Summary

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide.

Snowflake

Fundamentals

6 star dividend payer and undervalued.


Similar Companies

Share Price & News

How has Principal Financial Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.2%

PFG

0.1%

US Insurance

0.5%

US Market


1 Year Return

4.6%

PFG

13.8%

US Insurance

6.8%

US Market

Return vs Industry: PFG underperformed the US Insurance industry which returned 13.8% over the past year.

Return vs Market: PFG underperformed the US Market which returned 6.8% over the past year.


Shareholder returns

PFGIndustryMarket
7 Day1.2%0.1%0.5%
30 Day-1.0%-1.8%-0.8%
90 Day-4.8%-1.6%-0.9%
1 Year9.0%4.6%16.6%13.8%9.2%6.8%
3 Year18.3%6.4%44.6%33.5%45.6%36.2%
5 Year31.6%11.2%69.6%49.4%63.2%45.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Principal Financial Group undervalued compared to its fair value and its price relative to the market?

43.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PFG ($56) is trading below our estimate of fair value ($99.23)

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


Price To Earnings Ratio

PE vs Industry: PFG is good value based on its PE Ratio (10.4x) compared to the Insurance industry average (15.6x).

PE vs Market: PFG is good value based on its PE Ratio (10.4x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: PFG is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: PFG is good value based on its PB Ratio (1.1x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

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

5.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PFG's forecast earnings growth (5.6% per year) is above the savings rate (2.7%).

Earnings vs Market: PFG's earnings (5.6% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: PFG's revenue (4.8% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: PFG's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PFG's Return on Equity is forecast to be low in 3 years time (12%).


Next Steps

Past Performance

How has Principal Financial Group performed over the past 5 years?

13.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: PFG's earnings have grown by 13.7% per year over the past 5 years.

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

Earnings vs Industry: PFG had negative earnings growth (-39.8%) over the past year, making it difficult to compare to the Insurance industry average (1.4%).


Return on Equity

High ROE: PFG's Return on Equity (10.7%) is considered low.


Return on Assets

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


Return on Capital Employed

ROCE Improving: PFG's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Principal Financial Group'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: PFG has a low level of unsold assets or inventory.

Debt Coverage by Assets: PFG's debt is covered by short term assets (assets are 1.898030x debt).


Financial Institutions Analysis

Asset Level: PFG's level of assets compared to its equity is moderate.

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

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

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

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

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


Next Steps

Dividend

What is Principal Financial Group's current dividend yield, its reliability and sustainability?

3.93%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.4%forecastin3Years4.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: PFG's dividend (3.93%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: PFG's dividend (3.93%) is in the top 25% of dividend payers in the US market (3.73%)

Stable Dividend: PFG's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.1%), PFG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PFG's dividends in 3 years are forecast to be well covered by earnings (37.3% payout ratio).


Next Steps

Management

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

2.7yrs

Average management tenure


CEO

Dan Houston (57yo)

4.2yrs

Tenure

US$12,227,017

Compensation

Mr. Daniel Joseph Houston, also known as Dan, has been Chairman of the Board at Greater Des Moines Partnership since January 2018. He has been the Chief Executive Officer of Principal Financial Group, Inc. ...


CEO Compensation Analysis

Compensation vs. Market: Dan's total compensation ($USD12.23M) is about average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

2.7yrs

Average Tenure

60yo

Average Age

Experienced Management: PFG's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

12.9yrs

Average Tenure

63.5yo

Average Age

Experienced Board: PFG's board of directors are seasoned and experienced ( 12.9 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$1,202,50006 Nov 18
Charles Gelatt
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares25,000
Max PriceUS$48.10

Ownership Breakdown


Management Team

  • Karen Shaff (64yo)

    Executive VP

    • Tenure: 18.5yrs
  • Gary Scholten (61yo)

    Executive VP

    • Tenure: 16.9yrs
  • Strable Strable-Soethout (50yo)

    Executive VP & CFO

    • Tenure: 2.7yrs
    • Compensation: US$3.45m
  • Pat Halter (59yo)

    CEO & President of Principal Global Investors

    • Tenure: 0yrs
    • Compensation: US$3.68m
  • Dan Houston (57yo)

    Chairman

    • Tenure: 4.2yrs
    • Compensation: US$12.23m
  • Tim Dunbar (61yo)

    President of Principal Global Asset Management Business

    • Tenure: 1.1yrs
    • Compensation: US$2.56m
  • John Egan (57yo)

    Vice President of Investor Relations

    • Tenure: 9.5yrs
  • Luis Valdés (61yo)

    President & CEO of Principal International

    • Tenure: 1.8yrs
    • Compensation: US$2.86m
  • Beth Wood

    Senior VP & Chief Marketing Officer

    • Tenure: 0.3yrs
  • Betsy Happe

    Senior VP & Chief Compliance Officer

    • Tenure: 0.8yrs

Board Members

  • Sandra Helton (69yo)

    Independent Director

    • Tenure: 18.4yrs
    • Compensation: US$284.95k
  • Betsy Bernard (64yo)

    Independent Director

    • Tenure: 18.7yrs
    • Compensation: US$282.45k
  • Mike Dan (68yo)

    Independent Director

    • Tenure: 13.4yrs
    • Compensation: US$269.95k
  • Liz Tallett (70yo)

    Lead Director

    • Tenure: 12.4yrs
    • Compensation: US$289.95k
  • Roger Hochschild (54yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$267.45k
  • Jocelyn Carter-Miller (61yo)

    Independent Director

    • Tenure: 18.5yrs
    • Compensation: US$284.95k
  • Charles Gelatt (71yo)

    Independent Director

    • Tenure: 18.5yrs
    • Compensation: US$264.95k
  • Scott Mills (51yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$284.95k
  • Blair Pickerell (63yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$264.95k
  • Dan Houston (57yo)

    Chairman

    • Tenure: 4.2yrs
    • Compensation: US$12.23m

Company Information

Principal Financial Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Principal Financial Group, Inc.
  • Ticker: PFG
  • Exchange: NasdaqGS
  • Founded: 1879
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: US$15.613b
  • Shares outstanding: 278.80m
  • Website: https://www.principal.com

Number of Employees


Location

  • Principal Financial Group, Inc.
  • 711 High Street
  • Des Moines
  • Iowa
  • 50392
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PFGNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 2001
PG4DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2001
0KO5LSE (London Stock Exchange)YesCommon StockGBUSDOct 2001

Biography

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Reti ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 23:39
End of Day Share Price2019/10/18 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.