This financial company is expected to grow by 11.9% in the next year. The current annual dividend yield is 5.58%, paid quarterly.
Principal Financial Group, Inc. (PFG)
From Sure Dividend
Principal Financial Group operates several businesses including insurance, primarily life insurance, and investment management, retirement solutions and asset management. The company was founded in 1879, and has a market capitalization of $11 billion.
For its second quarter, Principal Financial Group recorded revenues of $460 million for its retirement and income solutions fee business, up 19% from the previous year’s second quarter. Assets under management (AUM) grew to $702 billion, based on the global equity market recovery during the quarter.
Over the last five years, 80% of the company’s AUM outperformed its peer average over the last five years, while 77% of AUM holds a Morningstar rating of 4 or 5 stars.
Earnings-per-share were $1.46, which easily beat the consensus estimate. Full-year profits will likely be down versus 2019 due to the coronavirus, but we do not see this as reflective of the underlying earnings power of Principal Financial.
Principal stock trades for a P/E ratio of 8.6, below our fair value estimate of 11. Expansion of the P/E multiple could fuel 5% annual returns through 2025. The combination of 5% expected EPS growth, the dividend yield, and an expanding P/E multiple leads to expected total returns of 15.5% per year over the next five years.
Ben Reynolds & Bob Ciura, Sure Dividend Newsletter, suredividend.com, support@suredividend.com, 800-531-0465, September 14, 2020