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Here's Why You Should Retain Prudential Financial (PRU) Stock
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Prudential Financial, Inc. (PRU - Free Report) remains well-poised for growth, driven by business growth, lower expenses and cost saving initiatives and solid financial position.
Zacks Rank & Price Performance
Prudential Financial currently carries a Zacks Rank #3 (Hold). In the past year, PRU stock has lost 5.1% compared with the industry’s growth of 0.2%.
Image Source: Zacks Investment Research
Return on Equity
PRU’s return on equity for the trailing 12 months is 14%, which compares favorably with the industry average of 9.8%. This reflects efficiency in utilizing shareholders’ funds.
Optimistic Growth Projections
The Zacks Consensus Estimate for Prudential Financial’s 2023 and 2024 earnings per share is pegged at $11.93 and $12.78, indicating a respective year-over-year increase of 26.1% and 7.1%.
Business Tailwinds
Prudential Financial’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 gain from a higher net investment spread, which includes benefits from variable investment income, lower expenses on the back of cost-saving initiatives and rising interest rates. Given its leading position in universal, term and variable life insurance and expanding Retirement business, premium growth is likely to continue in the coming quarters.
The U.S. business continues to shift toward higher growth and less market-sensitive products and markets, enhance customer experience, while reducing costs and further expand addressable markets.
The multi-line insurer continues to invest in acquisitions and partnerships that enable it to grow in emerging markets. In the third quarter of 2022, the company acquired a 33% minority interest in Alexander Forbes Group Holdings Limited in South Africa. This investment is consistent with PRU’s strategic focus internationally on higher-growth emerging markets. The deal furthers the partnership’s specific objective to identify and make strategic investments in high-quality financial services companies in selected African geographies.
Prudential Financial undertakes several strategic initiatives, which poise it well for long-term growth. It continues to invest in the long-term sustainable growth of business through programmatic acquisitions and partnerships in emerging markets to build scale and complement businesses in support of long-term growth.
The company’s solid financial position provides it with the flexibility to execute its transformation and invest in the long-term growth of businesses.
Prudential Financial has been increasing its dividend for the past 15 years. Its dividend yield of 6.4% compares favorably with the industry’s figure of 2.9%. In February 2023, the board also authorized 4% dividend increase beginning in the first quarter, which represents 15th consecutive annual dividend increase. PRU continues to balance investments in the growth of businesses with returning capital to shareholders.
American International Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 9.22%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 42.6% and 20.8% year-over-year growth, respectively. In the past year, the insurer has gained 10%.
Assurant’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 18.1%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 22.1% and 16.1% year-over-year growth, respectively. In the past year, the insurer has declined 24.2%.
Old Republic International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.8%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 9.1% and 6.4% north, respectively, in the past 60 days. In the past year, the insurer has gained 18%.
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Here's Why You Should Retain Prudential Financial (PRU) Stock
Prudential Financial, Inc. (PRU - Free Report) remains well-poised for growth, driven by business growth, lower expenses and cost saving initiatives and solid financial position.
Zacks Rank & Price Performance
Prudential Financial currently carries a Zacks Rank #3 (Hold). In the past year, PRU stock has lost 5.1% compared with the industry’s growth of 0.2%.
Image Source: Zacks Investment Research
Return on Equity
PRU’s return on equity for the trailing 12 months is 14%, which compares favorably with the industry average of 9.8%. This reflects efficiency in utilizing shareholders’ funds.
Optimistic Growth Projections
The Zacks Consensus Estimate for Prudential Financial’s 2023 and 2024 earnings per share is pegged at $11.93 and $12.78, indicating a respective year-over-year increase of 26.1% and 7.1%.
Business Tailwinds
Prudential Financial’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 gain from a higher net investment spread, which includes benefits from variable investment income, lower expenses on the back of cost-saving initiatives and rising interest rates. Given its leading position in universal, term and variable life insurance and expanding Retirement business, premium growth is likely to continue in the coming quarters.
The U.S. business continues to shift toward higher growth and less market-sensitive products and markets, enhance customer experience, while reducing costs and further expand addressable markets.
The multi-line insurer continues to invest in acquisitions and partnerships that enable it to grow in emerging markets. In the third quarter of 2022, the company acquired a 33% minority interest in Alexander Forbes Group Holdings Limited in South Africa. This investment is consistent with PRU’s strategic focus internationally on higher-growth emerging markets. The deal furthers the partnership’s specific objective to identify and make strategic investments in high-quality financial services companies in selected African geographies.
Prudential Financial undertakes several strategic initiatives, which poise it well for long-term growth. It continues to invest in the long-term sustainable growth of business through programmatic acquisitions and partnerships in emerging markets to build scale and complement businesses in support of long-term growth.
The company’s solid financial position provides it with the flexibility to execute its transformation and invest in the long-term growth of businesses.
Prudential Financial has been increasing its dividend for the past 15 years. Its dividend yield of 6.4% compares favorably with the industry’s figure of 2.9%. In February 2023, the board also authorized 4% dividend increase beginning in the first quarter, which represents 15th consecutive annual dividend increase. PRU continues to balance investments in the growth of businesses with returning capital to shareholders.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are American International Group, Inc. (AIG - Free Report) , Assurant, Inc. (AIZ - Free Report) and Old Republic International Corporation (ORI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
American International Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 9.22%.
The Zacks Consensus Estimate for AIG’s 2023 and 2024 earnings implies 42.6% and 20.8% year-over-year growth, respectively. In the past year, the insurer has gained 10%.
Assurant’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 18.1%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 22.1% and 16.1% year-over-year growth, respectively. In the past year, the insurer has declined 24.2%.
Old Republic International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.8%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 9.1% and 6.4% north, respectively, in the past 60 days. In the past year, the insurer has gained 18%.