Principal Financial (PFG) AI Stock Analysis

• Market Cap: $18.12B
• Dividend Yield: 3.76%
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.92
• Revenue Growth: 5.84%
• EPS Growth: -10.64%
• Country: US
• Employees: 19,700
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Diversified
• EPS (TTM): 1.81
• Shares Outstanding: 224,190,780
• 10 Day Avg. Volume: 1,201,884
• 30 Day Avg. Volume: 1,082,203
• PEG Ratio: -0.52
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.49
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 0.29
• Enterprise Value/Gross Profit: 2.60
• Enterprise Value/Ebitda: 3.99
• 1Y Price Target: $80.80
• Price Target Upside: 0.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 75 Outperform
• Price Target: $87.00 ▲(8.06%Upside)

Principal Financial's overall stock score is driven by strong cash flow management, solid earnings growth, and attractive valuation metrics. While technical indicators suggest slight caution due to recent price trends, the company's strategic initiatives and strong segment performance, particularly in retirement and pension risk transfers, underpin its robust financial standing.

Positive Factors

Business Strategy

PFG's focus on the less competitive small and midsize business (SMB) marketplace supports solid growth, return, and cash flow profiles.

Cash Flow

PFG's divestment of capital-intensive retail fixed annuities and life insurance business lines has resulted in an above-average free cash flow profile for conversion rate and growth outlooks.

Negative Factors

Earnings Impact

PFG's international pension business earnings have been impacted by a stronger U.S. dollar over the past decade.

Market Sensitivity

PFG faces macro sensitivities, including elevated equity market sensitivity and foreign exchange impacts on earnings within its international pension operations.

Principal Financial Business Overview & Revenue Model

Company Description

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.

How the Company Makes Money

Principal Financial Group generates revenue through a diversified business model that includes several key streams. The Retirement and Income Solutions segment provides retirement plan products, services, and annuities, earning money primarily through fees and premiums. Principal Global Investors offers investment management services, generating income from management fees and performance-based fees associated with its investment products. The Principal International segment expands the company's global reach, offering similar financial services outside the U.S., contributing to its earnings through premiums, fees, and investment income. U.S. Insurance Solutions includes individual and group insurance products, where revenue is derived from policyholder premiums and investment income from the assets backing the insurance policies. Strategic partnerships and an emphasis on sustainable and responsible investment practices also play a significant role in enhancing the company's revenue streams.

Principal Financial Financial Statement Overview

Summary

Principal Financial showcases a solid financial performance with strong cash flow management and reasonable profitability. While revenue growth has been inconsistent, the company maintains a stable balance sheet with manageable debt levels. The insurance industry context justifies some of the financial leverage observed. Continued focus on improving revenue trends and profitability margins would strengthen the company's financial position further.

Income Statement

The Income Statement shows robust profitability with a strong Gross Profit Margin consistently at 100% due to the nature of the industry. The Net Profit Margin stands at 8.60% for the TTM (Trailing-Twelve-Months), showing profitability but with room for improvement. Revenue growth has been volatile, with a notable decline of 25.15% from 2022 to 2024. EBIT Margin for TTM is 12.89%, indicating operational efficiency, while EBITDA Margin is 9.21% reflecting decent operating performance.

Balance Sheet

The Balance Sheet reflects a stable financial structure with a Debt-to-Equity Ratio of 0.39, indicating good leverage management. Return on Equity (ROE) for TTM is 9.26%, which is moderate, showing efficient use of equity to generate profits. The Equity Ratio is 3.58%, suggesting a high reliance on liabilities which is typical in the insurance industry but could pose risks if not managed carefully.

Cash Flow

The Cash Flow Statement indicates strong cash generation with a Free Cash Flow Growth Rate of 8.68% from the previous year. The Operating Cash Flow to Net Income Ratio is 4.81, demonstrating excellent cash conversion. The Free Cash Flow to Net Income Ratio is 4.74, highlighting efficient cash utilization relative to reported earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.77B	16.13B	13.67B	17.54B	14.43B	14.74B
Gross Profit	6.79B	7.35B	5.90B	11.04B	7.08B	6.46B
EBITDA	1.29B	2.15B	1.01B	6.28B	2.19B	1.95B
Net Income	1.09B	1.57B	623.20M	4.76B	1.58B	1.40B
Balance Sheet
Total Assets	313.00B	313.66B	305.05B	303.00B	321.21B	313.47B
Cash, Cash Equivalents and Short-Term Investments	3.88B	29.94B	27.19B	67.74B	80.49B	81.56B
Total Debt	4.35B	4.11B	3.99B	4.08B	4.36B	4.36B
Total Liabilities	301.41B	302.19B	293.84B	292.70B	304.70B	296.60B
Stockholders Equity	11.22B	11.09B	10.92B	10.00B	16.13B	16.56B
Cash Flow
Free Cash Flow	4.93B	4.53B	3.69B	3.06B	3.09B	3.63B
Operating Cash Flow	5.00B	4.60B	3.79B	3.17B	3.22B	3.74B
Investing Cash Flow	-5.01B	-5.40B	-1.35B	1.06B	-5.66B	-5.03B
Financing Cash Flow	-279.20M	300.30M	-2.59B	-1.72B	1.92B	1.62B

Principal Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 80.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFG, the sentiment is Positive. The current price of 80.51 is above the 20-day moving average (MA) of 77.40, above the 50-day MA of 77.04, and above the 200-day MA of 80.24, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 63.71 is Neutral, neither overbought nor oversold. The STOCH value of 90.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFG.

Principal Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HIG	78 Outperform	$35.97B	12.62	18.49%	1.64%	7.55%	14.16%
PFG	75 Outperform	$18.12B	17.33	9.70%	3.76%	5.84%	-10.64%
ACGL	73 Outperform	$33.85B	9.34	18.42%	―	25.29%	-23.19%
EQH	71 Outperform	$16.98B	15.19	56.67%	1.93%	12.41%	14.76%
AEG	70 Neutral	$11.30B	15.99	9.36%	5.15%	-5.03%	―
AIG	68 Neutral	$48.75B	18.90	6.13%	2.10%	-44.30%	-33.09%
Sector *	64 Neutral	$6.62B	10.86	6.59%	5.05%	24.65%	0.99%

Principal Financial Corporate Events

Principal Financial Holds Annual Shareholders Meeting

On May 20, 2025, Principal Financial Group, Inc. held its annual shareholders meeting where key decisions were made. The shareholders elected Class III directors for a term ending in 2028, approved executive compensation, and ratified the appointment of independent registered public accountants, indicating continued stability and governance focus within the company.

The most recent analyst rating on (PFG) stock is a Sell with a $75.00 price target. To see the full list of analyst forecasts on Principal Financial stock, see the PFG Stock Forecast page.

Principal Financial Appoints New CFO Joel Pitz

On May 19, 2025, Principal Financial Group appointed Joel Pitz as Executive Vice President and Chief Financial Officer, succeeding Deanna Strable. Pitz, who has been with the company since 1995, previously served as Senior Vice President and Interim CFO. His extensive experience in aligning financial strategy with business goals is expected to benefit the company as it continues to pursue sustainable growth and value creation for stakeholders.

The most recent analyst rating on (PFG) stock is a Sell with a $75.00 price target. To see the full list of analyst forecasts on Principal Financial stock, see the PFG Stock Forecast page.

Principal Financial Reports Strong AUM Growth in March

As of March 31, 2025, Principal Financial Group reported assets under management totaling $717.9 billion, with $555.8 billion managed by Principal Asset Management – Investment Management and $133.5 billion by Principal Asset Management – International Pension. The company experienced a 1.4% positive impact on AUM due to foreign currency translation and market performance, highlighting its strategic allocations during market dislocations.