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Why You Should Hold on to Principal Financial (PFG) Stock
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Principal Financial Group, Inc. (PFG - Free Report) is poised for growth on the back of its higher single premium annuity sales, higher variable investment income, positive net cash flow and strong capital position.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings per share is pegged at $7.14, indicating a year-over-year increase of 13.3%. The expected long-term earnings growth rate is pegged at 5.9%.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has rallied 14.6% against the industry’s decline of 24.1% in the past year.
Image Source: Zacks Investment Research
Earnings Surprise History
Principal Financial has a solid record of beating earnings estimates in each of the last seven quarters.
Business Tailwinds
Principal Financial should continue to benefit from its 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 global asset management.
In 2022, Principal Financial expects to grow its operating earnings per share at a rate of 17% to 20%.
The Principal International segment is likely to benefit from higher single premium annuity sales in Chile. The segment’s operating earnings should gain from foreign currency tailwinds.
With positive net cash flow over the trailing 12 months, strong investment performance and the migration of institutional retirement and trust retirement assets, Principal Financial’s assets under management should continue to gain.
The Specialty Benefits Insurance business should continue to gain from improved claim experience, higher variable investment income, expense management and growth in the business.
Principal Financial boasts a strong capital position. It targets a capital level of $800 million at the holding company by the end of 2022. The statutory RBC ratio for Principal Life Insurance Company is estimated to be 415%, above the midpoint of the targeted RBC ratio range of 400%.
PFG has access to a $750 million contingent capital facility. It continues to maintain a 20% to 25% leverage ratio and expects it to continue to improve.
PFG hiked its dividend by 2% in the third quarter of 2022, which is in line with the targeted 40% dividend payout ratio and reflects strong business performance. It also boasts a solid dividend yield of 3.4%, which betters the industry average of 3.1%.
PFG expects to return $2.5 to $3 billion of capital to shareholders in 2022, consisting of $2-$2.3 billion in share repurchases. It completed a $700 million accelerated share deployable proceeds repurchase program in June 2022. Currently, $1.7 billion remains as part of the current repurchase authorization.
Stocks to Consider
Some better-ranked stocks from the finance sector are PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) , Prospect Capital Corporation (PSEC - Free Report) and Blue Owl Capital Inc. (OWL - Free Report) . While PennantPark Floating Rate and Prospect Capital currently sport a Zacks Rank #1 (Strong Buy), Blue Owl Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PennantPark’s earnings surpassed estimates in each of the last four quarters, the average surprise being 5.36%. In the past year, PennantPark has lost 6.3%.
The Zacks Consensus Estimate for PFLT’s 2022 and 2023 earnings per share indicates a year-over-year increase of 14.1% and 2.7%, respectively.
Prospect Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 16.3%. In the past year, Prospect Capital’s stock has lost 5.5%.
The Zacks Consensus Estimate for PSEC’s 2023 earnings per share indicates year-over-year increases of 18.5%.
Blue Owl Capital’s earnings surpassed estimates in three of the last four quarters and missed in one, the average surprise being 3.96%. In the past year, Blue Owl Capital’s stock has lost 26%.
The Zacks Consensus Estimate for OWL’s 2022 and 2023 earnings has moved 20.7% and 30%, north, respectively, in the past 30 days.
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Why You Should Hold on to Principal Financial (PFG) Stock
Principal Financial Group, Inc. (PFG - Free Report) is poised for growth on the back of its higher single premium annuity sales, higher variable investment income, positive net cash flow and strong capital position.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings per share is pegged at $7.14, indicating a year-over-year increase of 13.3%. The expected long-term earnings growth rate is pegged at 5.9%.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has rallied 14.6% against the industry’s decline of 24.1% in the past year.
Image Source: Zacks Investment Research
Earnings Surprise History
Principal Financial has a solid record of beating earnings estimates in each of the last seven quarters.
Business Tailwinds
Principal Financial should continue to benefit from its 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 global asset management.
In 2022, Principal Financial expects to grow its operating earnings per share at a rate of 17% to 20%.
The Principal International segment is likely to benefit from higher single premium annuity sales in Chile. The segment’s operating earnings should gain from foreign currency tailwinds.
With positive net cash flow over the trailing 12 months, strong investment performance and the migration of institutional retirement and trust retirement assets, Principal Financial’s assets under management should continue to gain.
The Specialty Benefits Insurance business should continue to gain from improved claim experience, higher variable investment income, expense management and growth in the business.
Principal Financial boasts a strong capital position. It targets a capital level of $800 million at the holding company by the end of 2022. The statutory RBC ratio for Principal Life Insurance Company is estimated to be 415%, above the midpoint of the targeted RBC ratio range of 400%.
PFG has access to a $750 million contingent capital facility. It continues to maintain a 20% to 25% leverage ratio and expects it to continue to improve.
PFG hiked its dividend by 2% in the third quarter of 2022, which is in line with the targeted 40% dividend payout ratio and reflects strong business performance. It also boasts a solid dividend yield of 3.4%, which betters the industry average of 3.1%.
PFG expects to return $2.5 to $3 billion of capital to shareholders in 2022, consisting of $2-$2.3 billion in share repurchases. It completed a $700 million accelerated share deployable proceeds repurchase program in June 2022. Currently, $1.7 billion remains as part of the current repurchase authorization.
Stocks to Consider
Some better-ranked stocks from the finance sector are PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) , Prospect Capital Corporation (PSEC - Free Report) and Blue Owl Capital Inc. (OWL - Free Report) . While PennantPark Floating Rate and Prospect Capital currently sport a Zacks Rank #1 (Strong Buy), Blue Owl Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PennantPark’s earnings surpassed estimates in each of the last four quarters, the average surprise being 5.36%. In the past year, PennantPark has lost 6.3%.
The Zacks Consensus Estimate for PFLT’s 2022 and 2023 earnings per share indicates a year-over-year increase of 14.1% and 2.7%, respectively.
Prospect Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 16.3%. In the past year, Prospect Capital’s stock has lost 5.5%.
The Zacks Consensus Estimate for PSEC’s 2023 earnings per share indicates year-over-year increases of 18.5%.
Blue Owl Capital’s earnings surpassed estimates in three of the last four quarters and missed in one, the average surprise being 3.96%. In the past year, Blue Owl Capital’s stock has lost 26%.
The Zacks Consensus Estimate for OWL’s 2022 and 2023 earnings has moved 20.7% and 30%, north, respectively, in the past 30 days.