Principal Financial (PFG) AI Stock Analysis

• Market Cap: $19.63B
• Dividend Yield: 3.46%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.89
• Revenue Growth: 12.33%
• EPS Growth: N/A
• Country: US
• Employees: 19,700
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 2.10
• Shares Outstanding: 219,693,850
• 10 Day Avg. Volume: 1,340,271
• 30 Day Avg. Volume: 1,244,449
• 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: 1.18
• Enterprise Value/Revenue: 1.46
• Enterprise Value/Gross Profit: 3.11
• Enterprise Value/Ebitda: 12.19
• 1Y Price Target: $89.40
• Price Target Upside: 0.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 8.31
• Revenue Forecast (FY): $15.69B

• Rating: 76 Outperform
• Price Target: $95.00 ▲(6.80% Upside)

Principal Financial's strong valuation and positive earnings call sentiment are key strengths, supported by solid financial performance and technical indicators. The company's attractive P/E ratio and dividend yield enhance its investment appeal. While there are some concerns about cash flow trends and private market challenges, the overall outlook remains positive.

Positive Factors

Revenue Growth

Consistent revenue growth and margin expansion demonstrate effective strategic execution and a strong market position, supporting long-term financial stability.

Strong Capital Returns

Robust capital returns through dividends and buybacks reflect strong cash generation and management's commitment to shareholder value, enhancing investor confidence.

Global Asset Management Growth

Significant growth in asset management sales indicates strong demand and effective market penetration, supporting sustained revenue and profit growth.

Negative Factors

Actuarial Assumption Impact

Unfavorable impacts from actuarial assumptions can affect earnings predictability, posing a risk to financial performance and strategic planning.

Private Market Challenges

Challenges in private markets may lead to increased risk exposure, affecting the company's ability to maintain stable returns and manage investments effectively.

Investment Performance Concerns

Underperformance in key investment products can impact client retention and asset inflows, potentially affecting long-term revenue growth and market competitiveness.

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 generates revenue through multiple key streams, primarily from fees and commissions associated with its investment management and insurance products. The Retirement and Income Solutions segment earns fees from managing retirement plans and providing annuities. Principal Global Investors contributes revenue through asset management fees based on the performance and size of investment portfolios managed for institutional and retail clients. The insurance segment generates income through premiums received from life and health insurance policies. Additionally, PFG benefits from strategic partnerships with other financial institutions and organizations, enhancing its distribution capabilities and expanding its client reach, which further contributes to its overall earnings.

Principal Financial Financial Statement Overview

Summary

Principal Financial exhibits a stable financial position with strong cash generation capabilities and a conservative leverage profile. However, the decline in revenue growth and profitability margins in the TTM period suggests potential challenges in maintaining growth momentum. The company should focus on improving operational efficiency and exploring growth opportunities to enhance financial performance.

Income Statement

Principal Financial's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate by 4.06%, reflecting challenges in maintaining top-line growth. However, the company maintains a stable gross profit margin of 45.11% and a net profit margin of 7.53%, which are respectable for the industry. The EBIT and EBITDA margins have decreased to 8.93%, indicating some pressure on operational efficiency.

Balance Sheet

The balance sheet is relatively strong with a debt-to-equity ratio of 0.35, suggesting a conservative leverage position. The return on equity (ROE) is 10.14%, which is decent but has decreased from previous years, indicating a potential decline in shareholder returns. The equity ratio stands at 3.53%, showing a solid equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 12.69% in the TTM period, which could impact future investments and dividends. However, the operating cash flow to net income ratio is robust at 181.59%, indicating strong cash generation relative to net income. The free cash flow to net income ratio is nearly 1, demonstrating efficient conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.80B	16.13B	13.67B	17.54B	14.43B	14.74B
Gross Profit	7.42B	7.35B	5.90B	11.04B	7.08B	6.46B
EBITDA	1.89B	2.15B	1.01B	6.28B	2.19B	1.95B
Net Income	1.57B	1.57B	623.20M	4.76B	1.58B	1.40B
Balance Sheet
Total Assets	334.49B	313.66B	305.05B	303.00B	304.66B	313.47B
Cash, Cash Equivalents and Short-Term Investments	31.99B	29.94B	70.38B	67.74B	80.49B	81.56B
Total Debt	3.94B	4.11B	3.99B	4.08B	4.36B	4.36B
Total Liabilities	322.36B	302.19B	293.84B	292.70B	288.20B	296.60B
Stockholders Equity	11.67B	11.09B	10.92B	10.00B	16.07B	16.56B
Cash Flow
Free Cash Flow	4.17B	4.53B	3.69B	3.06B	3.09B	3.63B
Operating Cash Flow	4.25B	4.60B	3.79B	3.17B	3.22B	3.74B
Investing Cash Flow	-4.80B	-5.40B	-1.35B	1.06B	-5.66B	-5.03B
Financing Cash Flow	-484.40M	300.30M	-2.59B	-1.72B	1.92B	1.62B

Principal Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.95
• 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 88.95 is above the 20-day moving average (MA) of 87.01, above the 50-day MA of 83.31, and above the 200-day MA of 78.99, indicating a bullish trend. The MACD of 1.93 indicates Negative momentum. The RSI at 61.08 is Neutral, neither overbought nor oversold. The STOCH value of 54.93 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	79 Outperform	$34.77B	9.03	17.81%	―	16.68%	-28.54%
HIG	78 Outperform	$38.55B	11.30	20.07%	1.55%	7.11%	22.52%
PFG	76 Outperform	$19.63B	13.01	13.74%	3.46%	12.33%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AEG	64 Neutral	$11.80B	8.23	14.42%	5.86%	-6.19%	―
AIG	60 Neutral	$46.48B	15.44	7.68%	2.03%	-23.02%	52.43%
EQH	40 Underperform	$13.76B	―	-41.33%	2.20%	7.70%	-155.12%

Principal Financial Corporate Events

Principal Financial Reports $784.3 Billion in Assets

As of September 30, 2025, Principal Financial Group reported assets under management totaling $784.3 billion. This includes $601.6 billion managed by Principal Asset Management – Investment Management and $150.7 billion managed by Principal Asset Management – International Pension. The report highlights the company’s exposure to various market segments, such as small and mid-cap equities, high yield securities, and emerging market exchange rates, which are crucial during periods of market volatility.