Financial Analysis: Principal Financial Group (PFG) vs. Prudential Public Limited (PUK)

Prudential Public Limited (NYSE: PUK) and Principal Financial Group (NYSE:PFG) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Institutional and Insider Ownership

1.6% of Prudential Public Limited shares are held by institutional investors. Comparatively, 68.3% of Principal Financial Group shares are held by institutional investors. 1.5% of Principal Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Prudential Public Limited has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, Principal Financial Group has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares Prudential Public Limited and Principal Financial Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Prudential Public Limited $104.66 billion 0.60 $6.57 billion N/A N/A
Principal Financial Group $12.56 billion 1.55 $1.88 billion $4.40 15.30

Prudential Public Limited has higher revenue and earnings than Principal Financial Group.

Dividends

Prudential Public Limited pays an annual dividend of $0.78 per share and has a dividend yield of 1.6%. Principal Financial Group pays an annual dividend of $1.88 per share and has a dividend yield of 2.8%. Principal Financial Group pays out 42.7% of its earnings in the form of a dividend. Prudential Public Limited has raised its dividend for 4 consecutive years and Principal Financial Group has raised its dividend for 5 consecutive years. Principal Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Prudential Public Limited and Principal Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prudential Public Limited 0 2 3 0 2.60
Principal Financial Group 1 5 2 0 2.13

Principal Financial Group has a consensus price target of $65.00, indicating a potential downside of 3.46%. Given Principal Financial Group’s higher possible upside, analysts plainly believe Principal Financial Group is more favorable than Prudential Public Limited.

Profitability

This table compares Prudential Public Limited and Principal Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prudential Public Limited N/A N/A N/A
Principal Financial Group 10.15% 13.57% 0.63%

Summary

Principal Financial Group beats Prudential Public Limited on 10 of the 16 factors compared between the two stocks.

About Prudential Public Limited

Prudential Public Limited Company is an international financial services company. The Company offers a range of retail financial products and services and asset management services throughout these territories. The Company operates through Insurance operations and Asset management operations. The retail financial products and services include life insurance, pensions and annuities as well as collective investment schemes. Its insurance operations include Asia, the United States (Jackson National Life Insurance Company (Jackson)) and the United Kingdom. Its asset management operations include Eastspring Investments, M&G and Prudential Capital.

About Principal Financial Group

Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate. The Company offers a portfolio of products and services for retirement savings and retirement income. The Company’s Principal Global Investors segment manages assets for investors around the world. The Company offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The Company’s U.S. Insurance Solutions segment provides group and individual insurance solutions. It focuses on small and medium-sized businesses, providing a range of retirement and employee benefit solutions, and individual insurance solutions to meet the needs of the business owners and their employees.

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