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Why You Should Hold on to Prudential Financial (PRU) Stock
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Prudential Financial, Inc.’s (PRU - Free Report) business growth, higher net investment spread, lower expenses, financial flexibility and favorable growth estimates make it worth retaining in one’s portfolio.
Earnings Surprise History
Prudential Financial has a decent surprise history, beating earnings estimates in each of the last seven reported quarters.
Zacks Rank & Price Performance
Prudential Financial currently carries a Zacks Rank #3 (Hold). In the past year, PRU stock has lost 5.5% compared with the industry’s decline of 13.8%.
Image Source: Zacks Investment Research
Return on Equity
PRU’s return on equity for the trailing 12 months is 9.3%, up 170 basis points (bps) year over year. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
This multi-line insurer’s international businesses remain well poised to gain from continued business growth, higher net investment spread, lower expenses, and higher earnings from joint venture investments, as well as favorable underwriting results.
U.S. businesses should continue to benefit from higher net investment spread and higher fee income, as well as favorable underwriting results, and a complementary mix of longevity and mortality businesses.
Prudential Financial continues to shift its business mix toward higher growth and less market-sensitive products and businesses to transform its capabilities, cost structure and also to enhance the addressable markets.
The multi-line insurer has a strong international presence that gives it more organic growth opportunities than its peers.
Prudential's solid balance sheet provides significant financial flexibility to execute its transformation strategy. Its robust financial position includes a well-diversified investment portfolio, a solid capital position that supports an AA financial strength rating as well as highly liquid assets. PRU’s other sources of funds include free cash flow from businesses and contingent capital facilities.
Based on operational excellence, Prudential Financial’s dividend payments have witnessed a CAGR of 9.5% in the past nine years (2014-2022) and currently yield 4.9%, better than the industry average of 2.4%.
The Zacks Consensus Estimate for Prudential Financial’s 2023 earnings per share is pegged at $12.92, indicating an increase of 10% from the year-ago reported figure.
The Zacks Consensus Estimate for 2022 has moved 0.3% north in the past 30 days. This should instill investors' confidence in the stock.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are James River Group Holdings, Ltd. (JRVR - Free Report) , American International Group, Inc. (AIG - Free Report) and MGIC Investment Corporation (MTG - Free Report) . While James River Group sports a Zacks Rank #1 (Strong Buy), American International and MGIC Investment carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for James River Group’s 2022 and 2023 earnings implies 136% and 13.1% year-over-year growth, respectively.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings has moved 15.1% and 4.9% north, respectively, in the past 60 days. In the past year, the insurer has declined 32.1%.
American International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 18.9%. In the past year, AIG stock has rallied 8.3%.
The Zacks Consensus Estimate for American International’s 2022 and 2023 earnings implies 1.2% and 21.2% year-over-year growth, respectively.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average beat being 10.9%. In the past year, MTG has declined 8.9%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 1.8% and 3.2% north, respectively, in the past 60 days.
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Why You Should Hold on to Prudential Financial (PRU) Stock
Prudential Financial, Inc.’s (PRU - Free Report) business growth, higher net investment spread, lower expenses, financial flexibility and favorable growth estimates make it worth retaining in one’s portfolio.
Earnings Surprise History
Prudential Financial has a decent surprise history, beating earnings estimates in each of the last seven reported quarters.
Zacks Rank & Price Performance
Prudential Financial currently carries a Zacks Rank #3 (Hold). In the past year, PRU stock has lost 5.5% compared with the industry’s decline of 13.8%.
Image Source: Zacks Investment Research
Return on Equity
PRU’s return on equity for the trailing 12 months is 9.3%, up 170 basis points (bps) year over year. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
This multi-line insurer’s international businesses remain well poised to gain from continued business growth, higher net investment spread, lower expenses, and higher earnings from joint venture investments, as well as favorable underwriting results.
U.S. businesses should continue to benefit from higher net investment spread and higher fee income, as well as favorable underwriting results, and a complementary mix of longevity and mortality businesses.
Prudential Financial continues to shift its business mix toward higher growth and less market-sensitive products and businesses to transform its capabilities, cost structure and also to enhance the addressable markets.
The multi-line insurer has a strong international presence that gives it more organic growth opportunities than its peers.
Prudential's solid balance sheet provides significant financial flexibility to execute its transformation strategy. Its robust financial position includes a well-diversified investment portfolio, a solid capital position that supports an AA financial strength rating as well as highly liquid assets. PRU’s other sources of funds include free cash flow from businesses and contingent capital facilities.
Based on operational excellence, Prudential Financial’s dividend payments have witnessed a CAGR of 9.5% in the past nine years (2014-2022) and currently yield 4.9%, better than the industry average of 2.4%.
The Zacks Consensus Estimate for Prudential Financial’s 2023 earnings per share is pegged at $12.92, indicating an increase of 10% from the year-ago reported figure.
The Zacks Consensus Estimate for 2022 has moved 0.3% north in the past 30 days. This should instill investors' confidence in the stock.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are James River Group Holdings, Ltd. (JRVR - Free Report) , American International Group, Inc. (AIG - Free Report) and MGIC Investment Corporation (MTG - Free Report) . While James River Group sports a Zacks Rank #1 (Strong Buy), American International and MGIC Investment carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for James River Group’s 2022 and 2023 earnings implies 136% and 13.1% year-over-year growth, respectively.
The Zacks Consensus Estimate for JRVR’s 2022 and 2023 earnings has moved 15.1% and 4.9% north, respectively, in the past 60 days. In the past year, the insurer has declined 32.1%.
American International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 18.9%. In the past year, AIG stock has rallied 8.3%.
The Zacks Consensus Estimate for American International’s 2022 and 2023 earnings implies 1.2% and 21.2% year-over-year growth, respectively.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average beat being 10.9%. In the past year, MTG has declined 8.9%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 1.8% and 3.2% north, respectively, in the past 60 days.