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PFG Outperforms Industry, Hits 52-Week High: How to Play the Stock
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Key Takeaways
Principal Financial expects long-term revenue and margin growth across all segments.
Strength in retirement, benefits, asset management and claims supports earnings gains.
Capital returns remain strong with higher dividends, buybacks and ample excess capital.
Principal Financial Group, Inc. (PFG - Free Report) hit a 52-week high of $90.63 on Dec. 10. Shares closed at $90.23 after gaining 13.8% in the past year, outperforming the industry’s growth of 6.8% and the Finance sector’s return of 11.8%. It, however, underperformed the S&P 500 composite’s growth of 15.3% in the past year.
Principal Financial has outperformed its peers, including CNO Financial Group, Inc. (CNO - Free Report) , Radian Group Inc. (RDN - Free Report) and Assurant, Inc. (AIZ - Free Report) . Shares of CNO, RDN, and AIZ have gained 7.2%, 6.3% and 2.5%, respectively, in the past year.
Image Source: Zacks Investment Research
With a market capitalization of $20.1 billion, the average number of shares traded in the last three months was 1.2 million.
PFG Trading Above 50-Day and 200-Day Moving Averages
Shares of Principal Financial are trading above the 50-day and 200-day simple moving averages (SMA) of $82.82 and $80.27, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
PFG Shares are Affordable
Principal Financial shares are trading at a price-to-book value of 1.72X, lower than the industry average of 2.58X, the Finance sector’s 4.22X, and the Zacks S&P 500 Composite’s 8.51X. Its pricing, at a discount to the industry average, gives a better entry point to investors. The stock has a Value Score of A. This style score helps find the most attractive value stocks.
Image Source: Zacks Investment Research
PFG’s Encouraging Growth Projection
The Zacks Consensus Estimate for Principal Financial’s 2025 earnings per share indicates a year-over-year increase of 18.9%. The consensus estimate for revenues is pegged at $15.76 billion, implying a year-over-year improvement of 0.8%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 13.5% and 7.1%, respectively, from the corresponding 2025 estimates.
Target Price Reflects PFG’s Potential Upside
Based on short-term price targets offered by 13 analysts, the Zacks average price target is $88.85 per share. The average indicates a potential 0.7% upside from the last closing price.
Image Source: Zacks Investment Research
Optimistic Analyst Sentiment on PFG
Two of the six analysts covering the stock have raised estimates for 2025, and three analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 0.1% and 0.6% north, respectively, in the last 30 days.
PFG’s Key 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 improved net investment income across its segments.
Principal Financial continues 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, plus global asset management, which helps it deliver solid operating earnings.
PFG estimates solid revenue growth as well as margin expansion across all its segments over the long term.
The Specialty Benefits Insurance business should continue to gain from record sales, strong retention and employment growth. Favorable claims, growth in the business 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. PFG exited the third quarter in a strong position with $1.6 billion of excess and available capital. For 2025, PFG remains well-positioned to deliver on enterprise long-term financial targets, with 9% to 12% growth in earnings per share and 75% to 85% free capital flow conversion.
PFG’s Distribution of Wealth
Principal Financial’s wealth distribution through share buybacks and dividend payments looks impressive. The board declared a fourth-quarter dividend that represented an 8% increase from the third quarter of 2024. This continues to align with the targeted 40% dividend payout ratio. It also boasts a solid dividend yield of 3.7%, higher than the industry average of 2.5%.
The company returned approximately $400 million to shareholders in the third quarter of 2025. PFG expects to deliver its capital return target of $1.4 billion to $1.7 billion, including $700 million to $1 billion of share repurchases in 2025. It intends to spend 35-45% of net income in share buybacks and about 10% in strategic M&A activities to enhance capabilities and support organic growth.
Conclusion
PFG's financial stability and favorable growth estimates bode well for growth. Principal Financial should benefit from strategic buyouts, strong retention, higher single premium annuity sales, effective capital deployment and positive net cash flow.
Image: Bigstock
PFG Outperforms Industry, Hits 52-Week High: How to Play the Stock
Key Takeaways
Principal Financial Group, Inc. (PFG - Free Report) hit a 52-week high of $90.63 on Dec. 10. Shares closed at $90.23 after gaining 13.8% in the past year, outperforming the industry’s growth of 6.8% and the Finance sector’s return of 11.8%. It, however, underperformed the S&P 500 composite’s growth of 15.3% in the past year.
Principal Financial has outperformed its peers, including CNO Financial Group, Inc. (CNO - Free Report) , Radian Group Inc. (RDN - Free Report) and Assurant, Inc. (AIZ - Free Report) . Shares of CNO, RDN, and AIZ have gained 7.2%, 6.3% and 2.5%, respectively, in the past year.
Image Source: Zacks Investment Research
With a market capitalization of $20.1 billion, the average number of shares traded in the last three months was 1.2 million.
PFG Trading Above 50-Day and 200-Day Moving Averages
Shares of Principal Financial are trading above the 50-day and 200-day simple moving averages (SMA) of $82.82 and $80.27, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
PFG Shares are Affordable
Principal Financial shares are trading at a price-to-book value of 1.72X, lower than the industry average of 2.58X, the Finance sector’s 4.22X, and the Zacks S&P 500 Composite’s 8.51X. Its pricing, at a discount to the industry average, gives a better entry point to investors. The stock has a Value Score of A. This style score helps find the most attractive value stocks.
Image Source: Zacks Investment Research
PFG’s Encouraging Growth Projection
The Zacks Consensus Estimate for Principal Financial’s 2025 earnings per share indicates a year-over-year increase of 18.9%. The consensus estimate for revenues is pegged at $15.76 billion, implying a year-over-year improvement of 0.8%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 13.5% and 7.1%, respectively, from the corresponding 2025 estimates.
Target Price Reflects PFG’s Potential Upside
Based on short-term price targets offered by 13 analysts, the Zacks average price target is $88.85 per share. The average indicates a potential 0.7% upside from the last closing price.
Image Source: Zacks Investment Research
Optimistic Analyst Sentiment on PFG
Two of the six analysts covering the stock have raised estimates for 2025, and three analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 0.1% and 0.6% north, respectively, in the last 30 days.
PFG’s Key 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 improved net investment income across its segments.
Principal Financial continues 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, plus global asset management, which helps it deliver solid operating earnings.
PFG estimates solid revenue growth as well as margin expansion across all its segments over the long term.
The Specialty Benefits Insurance business should continue to gain from record sales, strong retention and employment growth. Favorable claims, growth in the business 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. PFG exited the third quarter in a strong position with $1.6 billion of excess and available capital. For 2025, PFG remains well-positioned to deliver on enterprise long-term financial targets, with 9% to 12% growth in earnings per share and 75% to 85% free capital flow conversion.
PFG’s Distribution of Wealth
Principal Financial’s wealth distribution through share buybacks and dividend payments looks impressive. The board declared a fourth-quarter dividend that represented an 8% increase from the third quarter of 2024. This continues to align with the targeted 40% dividend payout ratio. It also boasts a solid dividend yield of 3.7%, higher than the industry average of 2.5%.
The company returned approximately $400 million to shareholders in the third quarter of 2025. PFG expects to deliver its capital return target of $1.4 billion to $1.7 billion, including $700 million to $1 billion of share repurchases in 2025. It intends to spend 35-45% of net income in share buybacks and about 10% in strategic M&A activities to enhance capabilities and support organic growth.
Conclusion
PFG's financial stability and favorable growth estimates bode well for growth. Principal Financial should benefit from strategic buyouts, strong retention, higher single premium annuity sales, effective capital deployment and positive net cash flow.
Optimistic analyst sentiment, solid growth projections and attractive valuations should continue to benefit PFG over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.