Principal Financial Group Inc (PFG) stock analysis

P/E below its 5-year median

Principal Financial's P/E of 12.7 is below its own 5-year median of 13.0.

P/E below the industry

Principal Financial's P/E of 12.7 is below the Accident and Health Insurance and Medical median of 21.3.

P/S above the industry

Principal Financial's price-to-sales of 1.46 is above the Accident and Health Insurance and Medical median of 0.80.

P/B below the industry

Principal Financial's price-to-book of 2.06 is below the Accident and Health Insurance and Medical median of 2.31.

Trading below fair value

The share price of $114.69 is below our fair value estimate of $132.98.

Margin of safety under 20%

The price is 13.8% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -3.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -34.4% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 25.6% over the last twelve months, against a 5-year average of -3.2% a year.

Growing slower than the industry

Revenue grew 5.2% over the last twelve months; the Accident and Health Insurance and Medical median is 6.8%.

Guidance lowered

Principal Financial lowered its 2026 non-GAAP ROE outlook on Feb 9, 2026.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity over 15%

Return on equity was 16.8% over the last twelve months and averaged 15.4% over five years.

Return on assets under 1%

Return on assets was 0.6%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Principal Financial's return on equity of 16.8% is above the Accident and Health Insurance and Medical median of 11.9%.

Earnings shrank over 5 years

Net income shrank 3.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 11.9% over the last twelve months, against a 5-year average of 12.0%.

Net margin above the industry

Principal Financial's net margin of 11.9% is above the Accident and Health Insurance and Medical median of 2.0%.

Low debt

Debt is 1.5% of shareholders' equity, under the 40% we consider low.

Debt rising against equity

Debt to equity rose from 0.5% five years ago to 1.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 3116% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term liquidity

Insurers do not split assets into current and non-current.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

Principal Financial paid dividends worth 2.8% of the share price over the last twelve months.

Yield below Treasuries

The 2.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Principal Financial yields 2.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 6 fiscal years.

Covered by earnings

Dividends take 35.5% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.