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Reasons Why Investors Should Retain Principal Financial (PFG)
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Principal Financial Group, Inc. (PFG - Free Report) continues to be an investor favorite on the back of its group benefits and protection in the United States, higher single premium annuity sales and strong capital position.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings is pegged at $6.86, indicating a 3% increase from the year-ago reported figure on 0.8% higher revenues of $13.59 billion. The consensus estimate for 2024 earnings is pegged at $7.60, indicating a 10.7% increase from the year-ago reported figure on 4.2% higher revenues of $14.16 billion.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has lost 2.1% compared with the industry’s decline of 8.9% 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 13.76%.
Business Tailwinds
PFG’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.
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.
Strong institutional flows across equities, real estate and specialty fixed income highlighting the value of diversified distribution through its institutional, retail and retirement channels are likely to drive positive net cash flow.
Principal Financial’s extensive distribution footprint, strategic buyouts and operational discipline should enhance the assets under management growth.
PFG boasts a strong capital position with sufficient cash generation capabilities and liquidity. By the end of 2022, its excess and available capital were $1.5 billion. Leverage ratio was within the 20% to 25% targeted range. The statutory RBC ratio for Principal Life Insurance Company was 406%.
Principal Financial’s capital deployment through share buybacks and dividend payment looks impressive. It also boasts a solid dividend yield of 2.8%. It returned $2.3 billion to shareholders in 2022, including nearly $1.7 billion of share repurchases and more than $640 million of dividends. It also deployed $300 million to debt reduction and approximately $200 million toward M&A bringing 2022 capital deployments to $2.8 billion.
Estimates for 2024 have moved up nearly 0.2% in the past 30 days, reflecting investor’s optimism.
Ares Management’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average beat being 5.00%. In the past year, ARES has rallied 1.8%.
The Zacks Consensus Estimate for ARES’ 2023 and 2024 earnings indicates 23.3% and 24.6% year-over-year growth, respectively.
BlackRock’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average beat being 8.81%. In the past year, BLK has lost 11.5%.
The Zacks Consensus Estimate for BLK’s 2024 earnings indicates 13.3% year-over-year growth.
AssetMark Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 7.95%. In the past year, AssetMark Financial has rallied 36%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.
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Reasons Why Investors Should Retain Principal Financial (PFG)
Principal Financial Group, Inc. (PFG - Free Report) continues to be an investor favorite on the back of its group benefits and protection in the United States, higher single premium annuity sales and strong capital position.
Growth Projections
The Zacks Consensus Estimate for Principal Financial’s 2023 earnings is pegged at $6.86, indicating a 3% increase from the year-ago reported figure on 0.8% higher revenues of $13.59 billion. The consensus estimate for 2024 earnings is pegged at $7.60, indicating a 10.7% increase from the year-ago reported figure on 4.2% higher revenues of $14.16 billion.
Zacks Rank & Price Performance
Principal Financial currently carries a Zacks Rank #3 (Hold). The stock has lost 2.1% compared with the industry’s decline of 8.9% 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 13.76%.
Business Tailwinds
PFG’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.
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.
Strong institutional flows across equities, real estate and specialty fixed income highlighting the value of diversified distribution through its institutional, retail and retirement channels are likely to drive positive net cash flow.
Principal Financial’s extensive distribution footprint, strategic buyouts and operational discipline should enhance the assets under management growth.
PFG boasts a strong capital position with sufficient cash generation capabilities and liquidity. By the end of 2022, its excess and available capital were $1.5 billion. Leverage ratio was within the 20% to 25% targeted range. The statutory RBC ratio for Principal Life Insurance Company was 406%.
Principal Financial’s capital deployment through share buybacks and dividend payment looks impressive. It also boasts a solid dividend yield of 2.8%. It returned $2.3 billion to shareholders in 2022, including nearly $1.7 billion of share repurchases and more than $640 million of dividends. It also deployed $300 million to debt reduction and approximately $200 million toward M&A bringing 2022 capital deployments to $2.8 billion.
Estimates for 2024 have moved up nearly 0.2% in the past 30 days, reflecting investor’s optimism.
Stocks to Consider
Some better-ranked stocks from the finance sector are Ares Management Corporation (ARES - Free Report) , BlackRock, Inc. (BLK - Free Report) and AssetMark Financial Holdings, Inc. (AMK - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ares Management’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average beat being 5.00%. In the past year, ARES has rallied 1.8%.
The Zacks Consensus Estimate for ARES’ 2023 and 2024 earnings indicates 23.3% and 24.6% year-over-year growth, respectively.
BlackRock’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average beat being 8.81%. In the past year, BLK has lost 11.5%.
The Zacks Consensus Estimate for BLK’s 2024 earnings indicates 13.3% year-over-year growth.
AssetMark Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 7.95%. In the past year, AssetMark Financial has rallied 36%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.