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Principal Financial (PFG) Up 56% in a Year: More Upside Left?
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Shares of Principal Financial Group, Inc. (PFG - Free Report) have rallied 55.7% in a year compared with the industry's increase of 52.1% and the Finance sector’s growth of 44.3%. The Zacks S&P 500 composite has gained 39.6% in the said time frame. With a market capitalization of $16.9 billion, average volume of shares traded in the last three months was 1.4 million.
Segmental strength, improving fee-based revenues, solid global asset management and sturdy capital position should continue to drive Principal Financial Group.
The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 3.8% and 0.7%, respectively in the past 60 days, reflecting analysts’ optimism.
Image Source: Zacks Investment Research
Can it Retain the Bull Run?
The Zacks Consensus Estimate for 2021 and 2022 indicates a year-over-year increase of 21.7% and 9.9% respectively. The expected long-term earnings growth rate is pegged at 15.4%.
Principal Financial should continue to benefit from strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia.
Principal Financial’s assets under management should continue to thrive, given extensive distribution footprint, best-in-class solutions, strategic buyouts and operational discipline.
The company has an impressive inorganic growth story. Management thus deploys a significant portion of its operating earnings for mergers and acquisitions.
It boasts a strong balance sheet by virtue of sufficient cash generation capabilities and liquidity supporting effective capital deployment. This Zacks Rank #2 (Buy) leader in global investment management business has hiked dividend for the 14th straight year, yielding 3.9%, higher than the industry average of 2.5%. The company projects $1.4-1.8 billion in capital deployment, including $600 million to $800 million of share repurchases in 2021 and targets 40% dividend payout ratio.
Principal Financial has an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Its shares are currently undervalued. Its price to earnings multiple of 9.5 is lower than the industry average of 14.8. It also has an impressive Value Score of A. Before valuation expands , its better to take position in the stock.
Ameriprise Financial delivered an earnings surprise of 14.80% in the last reported quarter.
BlackRock delivered an earnings surprise of 1.70% in the last reported quarter.
Franklin Resources delivered an earnings surprise of 6.76% in the last reported quarter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Principal Financial (PFG) Up 56% in a Year: More Upside Left?
Shares of Principal Financial Group, Inc. (PFG - Free Report) have rallied 55.7% in a year compared with the industry's increase of 52.1% and the Finance sector’s growth of 44.3%. The Zacks S&P 500 composite has gained 39.6% in the said time frame. With a market capitalization of $16.9 billion, average volume of shares traded in the last three months was 1.4 million.
Segmental strength, improving fee-based revenues, solid global asset management and sturdy capital position should continue to drive Principal Financial Group.
The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 3.8% and 0.7%, respectively in the past 60 days, reflecting analysts’ optimism.
Can it Retain the Bull Run?
The Zacks Consensus Estimate for 2021 and 2022 indicates a year-over-year increase of 21.7% and 9.9% respectively. The expected long-term earnings growth rate is pegged at 15.4%.
Principal Financial should continue to benefit from strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia.
Principal Financial’s assets under management should continue to thrive, given extensive distribution footprint, best-in-class solutions, strategic buyouts and operational discipline.
The company has an impressive inorganic growth story. Management thus deploys a significant portion of its operating earnings for mergers and acquisitions.
It boasts a strong balance sheet by virtue of sufficient cash generation capabilities and liquidity supporting effective capital deployment. This Zacks Rank #2 (Buy) leader in global investment management business has hiked dividend for the 14th straight year, yielding 3.9%, higher than the industry average of 2.5%. The company projects $1.4-1.8 billion in capital deployment, including $600 million to $800 million of share repurchases in 2021 and targets 40% dividend payout ratio.
Principal Financial has an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Its shares are currently undervalued. Its price to earnings multiple of 9.5 is lower than the industry average of 14.8. It also has an impressive Value Score of A. Before valuation expands , its better to take position in the stock.
Other Stocks to Consider
Investors interested in the same industry can look at Ameriprise Financial (AMP - Free Report) , BlackRock (BLK - Free Report) and Franklin Resources (BEN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameriprise Financial delivered an earnings surprise of 14.80% in the last reported quarter.
BlackRock delivered an earnings surprise of 1.70% in the last reported quarter.
Franklin Resources delivered an earnings surprise of 6.76% in the last reported quarter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>