Principal Financial (PFG) AI Stock Analysis

• Market Cap: $17.81B
• Dividend Yield: 3.71%
• Average Volume (3M): 1.31M
• Price to Earnings (P/E): 16.1
• Beta (1Y): 0.94
• Revenue Growth: -3.34%
• EPS Growth: -3.32%
• Country: US
• Employees: 19,700
• Sector: Financial
• Sector Strength: 77
• Industry: Insurance - Diversified
• EPS (TTM): 2.16
• Shares Outstanding: 222,768,450
• 10 Day Avg. Volume: 1,100,604
• 30 Day Avg. Volume: 1,314,122
• PEG Ratio: 0.07
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 1.09
• P/FCF Ratio: 3.86
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 1.42
• Enterprise Value/Gross Profit: 3.29
• Enterprise Value/Ebitda: 17.33
• 1Y Price Target: $86.50
• Price Target Upside: 8.15% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 73 Outperform
• Price Target: $88.00 ▲(10.03% Upside)

Principal Financial Group's overall stock score reflects a strong financial performance, particularly in cash flow management and profitability. The technical analysis indicates a stable market position, while the valuation is fair with an attractive dividend yield. The earnings call highlights significant growth and strategic confidence, despite some challenges. Corporate events are neutral, with leadership changes expected to drive future growth.

Positive Factors

Asset Management Earnings

Asset management earnings of $236 million outpaced the consensus expectation of $221 million, with higher management and performance fees contributing to revenue growth and expanded operating margin.

Corporate Expenses

Corporate and Other earnings of $(81) million finished better than the consensus expectation of $(99) million, driven by higher net investment income and lower operating expenses.

Negative Factors

Investment Management Outflows

Investment Management saw $4.2bn in net outflows in the quarter due to a couple large accounts exiting the fund complex.

Net Fund Flows

Net fund flows declined somewhat across RIS, Investment Management, and International Pension, all below consensus.

Retirement & Income Solutions

Retirement & Income Solutions had underlying pre-tax earnings that missed consensus, driven in part by lower than expected net fund flows.

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 several key streams. Its primary sources of income include premiums from life and health insurance products, fees from asset management services, and commissions from retirement plan services. The company earns premiums from its insurance offerings that provide financial protection to individuals and businesses. Additionally, it collects management fees on assets under management in its investment portfolios, which include mutual funds, retirement accounts, and other investment products. PFG also generates revenue through advisory services related to financial planning and investment strategies. Significant partnerships with financial institutions and corporations enhance its distribution channels and broaden its market reach, further contributing to its earnings.

Principal Financial Financial Statement Overview

Summary

The company shows robust profitability with a strong Gross Profit Margin and a moderate Net Profit Margin of 8.60%. Operational efficiency is indicated by an EBIT margin of 12.89%, but revenue growth has been volatile with a 25.15% decline from 2022 to 2024. The Balance Sheet is stable with good leverage management, though high reliance on liabilities is typical for the industry. Cash Flow is strong, with excellent cash conversion and utilization.

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: 79.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 79.98 is above the 20-day moving average (MA) of 78.18, above the 50-day MA of 78.48, and above the 200-day MA of 78.46, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 64.54 is Neutral, neither overbought nor oversold. The STOCH value of 63.15 is Neutral, 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
ACGL	81 Outperform	$34.42B	9.53	17.09%	―	23.79%	-32.09%
HIG	80 Outperform	$37.09B	11.96	19.55%	1.54%	7.67%	15.99%
AIG	75 Outperform	$44.90B	15.02	7.61%	2.02%	-33.87%	-5.72%
PFG	73 Outperform	$17.81B	16.10	10.16%	3.71%	-3.34%	-3.32%
EQH	71 Outperform	$15.80B	42.55	34.30%	1.89%	5.05%	-47.26%
AEG	69 Neutral	$11.82B	8.61	14.42%	5.84%	-6.19%	―
Sector *	68 Neutral	$18.05B	11.73	10.24%	3.73%	9.66%	1.70%

Principal Financial Corporate Events

Principal Financial Appoints Deanna Strable as New Chair

On August 17, 2025, Principal Financial Group’s Board of Directors elected Deanna D. Strable as the new Chair of the Board, effective September 2, 2025. She succeeds Daniel J. Houston, who will conclude his service on the Board after a distinguished 40-year career with the company. Strable, who has been with Principal since 1990, has played a pivotal role in the company’s growth and transformation, holding various leadership positions. Her appointment is expected to continue driving innovation, inclusion, and growth, enhancing shareholder value and customer satisfaction.

Principal Financial Advises Against Potemkin’s Mini-Tender Offer

Principal Financial Group, Inc. has received an unsolicited mini-tender offer from Potemkin Limited to purchase up to 100,000 shares of its common stock at a price significantly lower than the market value. On July 17, 2025, the company advised shareholders against accepting this offer, emphasizing that it does not endorse or associate with Potemkin’s proposal, and provided guidance for those who have already tendered their shares on how to withdraw them.

Principal Financial Reports $752.7 Billion Assets Under Management

As of June 30, 2025, Principal Financial Group reported assets under management totaling $752.7 billion, with a significant portion managed by Principal Asset Management’s Investment Management and International Pension divisions. The company’s strategic allocation during market fluctuations highlights its emphasis on diverse equity and fixed income products, reflecting its adaptability and potential impact on stakeholders.

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.