We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Principal Financial (PFG) States Growth Efforts Post Review
Read MoreHide Full Article
As an outcome of the strategic review, Principal Financial Group (PFG - Free Report) outlined measures to fuel profitability, lower capital intensity and risk, enhance cash flow conversion to support growth initiatives and generate long-term value for shareholders. Discontinuing sales of U.S. retail fixed annuities and consumer life insurance products, investing in and expanding growth areas as well as solidifying capital management strategy have been identified as measures, approved by the board, to help it achieve its goals.
Per Dan Houston, chairman, president, and CEO of Principal, “The outcome will result in a more focused portfolio and stronger capital management strategy that we believe positions Principal for strengthened leadership in higher growth markets and greater capital efficiency, leading to higher expected shareholder returns."
This Zacks Rank #3 (Hold) investment manager has decided to fully exit U.S. retail fixed annuities business. As a result, it will stop selling deferred annuities, payout annuities, indexed annuities and look for strategic alternatives, including divestiture, of the related in-force blocks. However, it will continue to sell variable annuity offerings, an important component of its retirement solutions portfolio. The company will also stop selling term life and universal life products to retail consumers, thus exiting the retail consumer market in U.S. individual life insurance. Here also, Principal Financial will look for strategic alternatives, including divestiture, for the in-force other related in-force blocks.
Principal Financial has always remained focused on fee-based revenue sources, which help it earn steadily. This strategic review will thus help it focus on retirement in the U.S. and select emerging markets, global asset management, and U.S. specialty benefits and protection in the small-to-medium-sized business market that in turn will ramp up fee-based revenues. 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, and solid global asset management have always been the pillars of Principal Financial.
Principal Financial boasts a strong capital position, with sufficient cash generation capabilities and liquidity and supporting effective capital deployment to enhance shareholders value. The board of directors thus approved a $1.2 billion buyback program. This is in addition to $675 million remaining under its authorization as on Mar 31, 2021. The company plans to buy back $1.3-$1.7 billion worth shares by 2022 and intends to deploy capital generated from operations and reduce excess capital to target levels to do so. Its targeted capital level of $800 million at the holding company, a risk-based capital ratio of 400%, a debt-to-capital ratio of 20 to 25 and targeted payout ratio of 40% stands unchanged.
Shares of Principal Financial Group have rallied 27.3% year to date compared with the industry's increase of 26.9%. Segmental strength, improving fee-based revenues, solid global asset management and sturdy capital position should continue to drive Principal Financial Group.
Blackstone Group delivered an earnings surprise of 33.33% 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.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Principal Financial (PFG) States Growth Efforts Post Review
As an outcome of the strategic review, Principal Financial Group (PFG - Free Report) outlined measures to fuel profitability, lower capital intensity and risk, enhance cash flow conversion to support growth initiatives and generate long-term value for shareholders. Discontinuing sales of U.S. retail fixed annuities and consumer life insurance products, investing in and expanding growth areas as well as solidifying capital management strategy have been identified as measures, approved by the board, to help it achieve its goals.
Per Dan Houston, chairman, president, and CEO of Principal, “The outcome will result in a more focused portfolio and stronger capital management strategy that we believe positions Principal for strengthened leadership in higher growth markets and greater capital efficiency, leading to higher expected shareholder returns."
This Zacks Rank #3 (Hold) investment manager has decided to fully exit U.S. retail fixed annuities business. As a result, it will stop selling deferred annuities, payout annuities, indexed annuities and look for strategic alternatives, including divestiture, of the related in-force blocks. However, it will continue to sell variable annuity offerings, an important component of its retirement solutions portfolio. The company will also stop selling term life and universal life products to retail consumers, thus exiting the retail consumer market in U.S. individual life insurance. Here also, Principal Financial will look for strategic alternatives, including divestiture, for the in-force other related in-force blocks.
Principal Financial has always remained focused on fee-based revenue sources, which help it earn steadily. This strategic review will thus help it focus on retirement in the U.S. and select emerging markets, global asset management, and U.S. specialty benefits and protection in the small-to-medium-sized business market that in turn will ramp up fee-based revenues. 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, and solid global asset management have always been the pillars of Principal Financial.
Principal Financial boasts a strong capital position, with sufficient cash generation capabilities and liquidity and supporting effective capital deployment to enhance shareholders value. The board of directors thus approved a $1.2 billion buyback program. This is in addition to $675 million remaining under its authorization as on Mar 31, 2021. The company plans to buy back $1.3-$1.7 billion worth shares by 2022 and intends to deploy capital generated from operations and reduce excess capital to target levels to do so. Its targeted capital level of $800 million at the holding company, a risk-based capital ratio of 400%, a debt-to-capital ratio of 20 to 25 and targeted payout ratio of 40% stands unchanged.
Shares of Principal Financial Group have rallied 27.3% year to date compared with the industry's increase of 26.9%. Segmental strength, improving fee-based revenues, solid global asset management and sturdy capital position should continue to drive Principal Financial Group.
Stocks to Consider
Some better-ranked stocks from the same industry are The Blackstone Group Inc. (BX - Free Report) , BlackRock (BLK - Free Report) and Franklin Resources (BEN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Blackstone Group delivered an earnings surprise of 33.33% 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.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>