Principal Financial Group, Inc.
Principal Financial Group, Inc. Fundamental Analysis
Principal Financial Group, Inc. (PFG) shows moderate financial fundamentals with a PE ratio of 16.20, profit margin of 7.58%, and ROE of 10.26%. The company generates $15.4B in annual revenue with strong year-over-year growth of 18.02%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 69.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze PFG's fundamental strength across five key dimensions:
Efficiency Score
WeakPFG struggles to generate sufficient returns from assets.
Valuation Score
ExcellentPFG trades at attractive valuation levels.
Growth Score
ModeratePFG shows steady but slowing expansion.
Financial Health Score
ModeratePFG shows balanced financial health with some risks.
Profitability Score
WeakPFG struggles to sustain strong margins.
Key Financial Metrics
Is PFG Expensive or Cheap?
P/E Ratio
PFG trades at 16.20 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, PFG's PEG of -0.67 indicates potential undervaluation.
Price to Book
The market values Principal Financial Group, Inc. at 1.62 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 13.56 times EBITDA. This signals the market has high growth expectations.
How Well Does PFG Make Money?
Net Profit Margin
For every $100 in sales, Principal Financial Group, Inc. keeps $7.58 as profit after all expenses.
Operating Margin
Core operations generate 9.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.26 in profit for every $100 of shareholder equity.
ROA
Principal Financial Group, Inc. generates $0.35 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Principal Financial Group, Inc. generates strong operating cash flow of $4.48B, reflecting robust business health.
Free Cash Flow
Principal Financial Group, Inc. generates strong free cash flow of $4.38B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $19.96 in free cash annually.
FCF Yield
PFG converts 23.52% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.20
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.67
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.62
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.21
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.35
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.003
vs 25 benchmark
ROCE
Return on capital employed
0.004
vs 25 benchmark
How PFG Stacks Against Its Sector Peers
| Metric | PFG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.20 | 18.50 | Better (Cheaper) |
| ROE | 10.26% | 809.00% | Weak |
| Net Margin | 7.58% | 2211.00% | Weak |
| Debt/Equity | 0.35 | 0.90 | Strong (Low Leverage) |
| Current Ratio | 0.76 | 691.82 | Weak Liquidity |
| ROA | 0.35% | -24320.00% (disorted) | Weak |
PFG outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Principal Financial Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
22.43%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
38.77%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
3.19%
Industry Style: Value, Dividend, Cyclical
Growing