10Y annualized return is
positive but below market average
at 3.8% per year
PFG has met or exceeded earnings expectations in
few
recent quarters (4/10)
Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Strong Return on Equity
Healthy Net Profit Margin
Low Debt-to-Equity Ratio
Strong Cash Position
🏆 Strong Financial Performance
🔒 Diverse Business Model
🌍 Strong Market Position
🚀 Ambitious Growth Targets
💡 Innovation in Retirement Solutions
🏗️ Strong Real Estate Market Position
High EV/EBITDA Ratio
Low Operating Profit Margin
Questionable Liquidity Ratios
📉 Currency Headwinds
💼 Competitive Market Pressures
🛑 Short-Term Flow Pressures
⚠️ Dependence on Market Conditions
Overall, Principal Financial Group exhibits a strong business model with diverse revenue streams and solid financial performance. However, they face challenges from currency fluctuations and competitive pressures in pricing. Future prospects remain positive with ambitious growth targets and innovation in their offerings, although there are short-term flow pressures to navigate.
Analysis Date: February 7, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Principal Financial Group, Inc. is a company that helps people and businesses plan for their financial future. They offer products that assist with retirement savings, like 401(k) plans, and provide different types of insurance, such as life and health insurance. Additionally, they manage investments to help grow money for individuals and companies. Founded in 1879 and based in Des Moines, Iowa, Principal aims to support financial well-being for its clients.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
PFG's Q1 results are likely to reflect higher average AUM, increased average invested assets in fixed maturities and higher sales of single premium gr...
Looking beyond Wall Street's top -and-bottom-line estimate forecasts for Principal Financial (PFG), delve into some of its key metrics to gain a deepe...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$260.70
Current Market Price: $70.92
IV/P Ratio: 3.68x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
73.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PFG
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (10.77)
P/B ratio ≤ 1.5 (1.53)
Current ratio ≥ 2.0
Long-term debt < Net current assets
Margin of safety (73.0%)
PFG does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
14.11%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
100.00%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
9.74%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The return on equity (ROE) of 14.11% reflects efficient use of equity capital and strong profitability relative to shareholder equity.
A net profit margin of 9.74% indicates that the company is capable of converting a significant portion of sales into actual profit, which is a positive sign for profitability.
With an operating profit margin of 6.55%, there is room for improvement in operational efficiency, as this margin is lower than typical industry standards.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.36x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
PFG: No data available
The debt-to-equity ratio of 0.37 indicates a conservative approach to debt, suggesting the company is less leveraged and has lower financial risk.
With cash per share at 129.04, the company holds a robust cash position, which can provide liquidity and flexibility for future investments.
Current, quick, and cash ratios all being 0.0 raise concerns about the company's short-term liquidity and ability to meet immediate obligations.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Principal Financial Group delivered an impressive adjusted non-GAAP earnings per share growth of 11% in 2024, exceeding their guidance of 9% to 12%. The company also returned $1.7 billion to shareholders, demonstrating a solid capital position.
The company operates across multiple segments including retirement solutions, asset management, and specialty benefits, which provides resilience and stability against market fluctuations. Their ability to leverage these businesses for cross-selling opportunities is a significant advantage.
Principal has established a strong foothold in the small and midsized business segment, which is a large and growing market. Their deep customer relationships and a track record of above-market growth highlight their competitive advantage.
The company experienced a significant negative impact on AUM due to foreign exchange rates, which decreased AUM by $28 billion for the full year, highlighting vulnerability to currency fluctuations.
There are indications of pricing competition in the retirement solutions market, which may pressure margins going forward. The company must remain vigilant to maintain profitability.
The company is targeting 9% to 12% EPS growth for 2025, reaffirming its commitment to deliver strong financial results. The outlook also includes a significant return of capital to shareholders.
Principal is exploring new opportunities in private assets within retirement plans and expanding its target date offerings, which could enhance their product suite and attract more customers.
The company is poised to benefit from a recovering commercial real estate market, with increased transactional activity and a strong pipeline in private capital investments.
Despite a positive outlook, the company anticipates continued short-term flow pressures in its retirement solutions segment due to demographic trends and market dynamics.
The company’s performance is closely tied to equity market conditions, and any downturn could negatively impact earnings and growth targets.