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Should You Retain Principal Financial (PFG) in Your Portfolio?
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Principal Financial Group, Inc. (PFG - Free Report) is poised for growth on the back of its strong retention and employment growth, improved claim experience, growth in the business and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings per share is pegged at $6.96, indicating a year-over-year increase of 7.8%. The expected long-term earnings growth rate is pegged at 5.5%.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has rallied 12.9% against the industry’s decline of 21.7% in the past year.
Image Source: Zacks Investment Research
Earnings Surprise History
Principal Financial has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 14.18%.
Business Tailwinds
Principal Financial’s revenue growth is expected to improve in the long run, riding on higher premiums and other considerations, fees and other revenues and higher net investment income across its segments.
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 record sales, strong retention and employment growth. Growth in the business, favorable claims and disciplined expense management should benefit its pre-tax operating earnings.
Principal Financial boasts a strong capital position. Its excess and available capital is currently estimated to be $1.4 billion and includes around $900 million at the holding company, higher than the $800 million target, $450 million in subsidiaries and $100 million in excess of the targeted 400% risk-based capital ratio.
Principal Financial expects to return $2.5-$3 billion of capital to shareholders in 2022, consisting of $2-$2.3 billion in share repurchases. Currently, $1.2 billion remains as part of the current repurchase authorization.
Stocks to Consider
Some better-ranked stocks from the finance sector are Portman Ridge Finance Corporation (PTMN - Free Report) , Prospect Capital Corporation (PSEC - Free Report) and SEI Investments Company (SEIC - Free Report) . While Portman Ridge and Prospect Capital sport a Zacks Rank #1 (Strong Buy), SEI Investments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Portman Ridge’s 2023 earnings indicates 2.3% year-over-year growth. In the past year, Portman Ridge’s stock has lost 8.3%.
The Zacks Consensus Estimate for PTMN’s 2023 earnings has moved 9.9% north in the past 60 days.
Prospect Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 18.39%. In the past year, Prospect Capital’s stock has lost 17.3%.
The Zacks Consensus Estimate for PSEC’s 2023 earnings per share indicates year-over-year increases of 2.9%.
SEI Investments’ earnings surpassed estimates in two of the last four quarters and matched in one, the average surprise being 4.14%. In the past year, SEIC has lost 5.2%.
The Zacks Consensus Estimate for SEIC’s 2023 earnings per share indicates year-over-year increases of 2.13%.
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Should You Retain Principal Financial (PFG) in Your Portfolio?
Principal Financial Group, Inc. (PFG - Free Report) is poised for growth on the back of its strong retention and employment growth, improved claim experience, growth in the business and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings per share is pegged at $6.96, indicating a year-over-year increase of 7.8%. The expected long-term earnings growth rate is pegged at 5.5%.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has rallied 12.9% against the industry’s decline of 21.7% in the past year.
Image Source: Zacks Investment Research
Earnings Surprise History
Principal Financial has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 14.18%.
Business Tailwinds
Principal Financial’s revenue growth is expected to improve in the long run, riding on higher premiums and other considerations, fees and other revenues and higher net investment income across its segments.
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 record sales, strong retention and employment growth. Growth in the business, favorable claims and disciplined expense management should benefit its pre-tax operating earnings.
Principal Financial boasts a strong capital position. Its excess and available capital is currently estimated to be $1.4 billion and includes around $900 million at the holding company, higher than the $800 million target, $450 million in subsidiaries and $100 million in excess of the targeted 400% risk-based capital ratio.
Principal Financial expects to return $2.5-$3 billion of capital to shareholders in 2022, consisting of $2-$2.3 billion in share repurchases. Currently, $1.2 billion remains as part of the current repurchase authorization.
Stocks to Consider
Some better-ranked stocks from the finance sector are Portman Ridge Finance Corporation (PTMN - Free Report) , Prospect Capital Corporation (PSEC - Free Report) and SEI Investments Company (SEIC - Free Report) . While Portman Ridge and Prospect Capital sport a Zacks Rank #1 (Strong Buy), SEI Investments carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Portman Ridge’s 2023 earnings indicates 2.3% year-over-year growth. In the past year, Portman Ridge’s stock has lost 8.3%.
The Zacks Consensus Estimate for PTMN’s 2023 earnings has moved 9.9% north in the past 60 days.
Prospect Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 18.39%. In the past year, Prospect Capital’s stock has lost 17.3%.
The Zacks Consensus Estimate for PSEC’s 2023 earnings per share indicates year-over-year increases of 2.9%.
SEI Investments’ earnings surpassed estimates in two of the last four quarters and matched in one, the average surprise being 4.14%. In the past year, SEIC has lost 5.2%.
The Zacks Consensus Estimate for SEIC’s 2023 earnings per share indicates year-over-year increases of 2.13%.