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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on PFG

The recent 3-month performance of Principal Financial Group, Inc. was negatively impacted by a Q1 earnings miss, with diluted earnings per common share coming in at $1.81, missing the Zacks Consensus Estimate of $1.85 per share. Despite higher revenues and operating earnings across most segments, improved assets under management, and increased average invested assets in fixed maturities, higher expenses offset these gains. Additionally, the company's Q1 results were likely influenced by the recent $3.64 billion capital raise for its Data Center Growth & Income Fund, which may have diverted resources away from other business segments.

1.c. Company Highlights

2. Principal Financial Group's Q3 2025 Earnings: A Strong Performance

Principal Financial Group reported a robust third-quarter performance, with adjusted earnings per share growing 13% year-over-year to $2.1, slightly below estimates of $2.18. The company's return on equity expanded significantly, reaching the high end of its target range. Revenue growth was driven by strong performance in the retirement ecosystem, small and midsized businesses, and global asset management. The company's free capital flow conversion ratio remained above target at over 90%.

Publication Date: Oct -30

📋 Highlights
  • Adjusted EPS Growth: 13% YoY and 14% year-to-date, surpassing targets.
  • ROE Expansion: Reached the high end of the target range, driven by strategic execution.
  • Free Capital Flow: 90% conversion ratio, exceeding target and enabling robust shareholder returns.
  • Shareholder Returns: $400M returned (including $225M share repurchases) and 8% dividend increase.
  • Private Markets Momentum: $1.7B net inflows and $3B AUM growth in active ETFs over 12 months.

Segment Performance

The retirement ecosystem segment saw significant growth, with Workplace Savings and Retirement Solutions (WSRS) transfer deposits increasing 13% year-over-year and total RIS sales rising 8% to $7 billion. The private markets area also performed well, with net inflows of $1.7 billion in the quarter. Kamal Bhatia highlighted the growth in global institutional, U.S. retail platform, and local managed products, with the company's focus on global distribution paying off.

Capital Management and Shareholder Returns

Principal Financial Group returned $400 million of capital to shareholders during the quarter, including $225 million of share repurchases and $173 million of common stock dividends. The company's capital position remains strong, with $1.6 billion of excess and available capital. Joel Pitz noted that the company expects elevated share buybacks in Q4, driven by its strong capital position.

Valuation and Outlook

With a Price-to-Book Ratio of 1.59 and a Dividend Yield of 3.66%, Principal Financial Group's valuation appears reasonable. The company's return on equity of 13.87% is also a positive indicator. Analysts estimate revenue growth of 8.8% for next year, suggesting a positive outlook. Given the company's strong financial performance and disciplined execution, it is well-positioned to deliver on its full-year financial commitments.

3. NewsRoom

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Capital Fund Management S.A. Buys Shares of 18,711 Principal Financial Group, Inc. $PFG

Dec -05

Source: defenseworld.net

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Groupe la Francaise Has $3.57 Million Stake in Principal Financial Group, Inc. $PFG

Dec -04

Source: defenseworld.net

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Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal

Dec -03

Source: gurufocus.com

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First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

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American Century Companies Inc. Has $18.96 Million Stock Holdings in Principal Financial Group, Inc. $PFG

Dec -03

Source: defenseworld.net

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Principal Financial Group: Share Buybacks Drive Share Value Growth

Nov -29

Source: seekingalpha.com

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This Financial Name Is Becoming A Dividend Standout With Steady Distribution Increases

Nov -26

Source: investors.com

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AXQ Capital LP Makes New Investment in Principal Financial Group, Inc. $PFG

Nov -25

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.36%)

6. Segments

Retirement and Income Solutions

Expected Growth: 5.5%

Principal Financial Group's Retirement and Income Solutions segment growth of 5.5% is driven by increasing demand for retirement plans, expansion of distribution channels, and strategic acquisitions. Additionally, the rise of the gig economy and growing need for income security in retirement are contributing to the segment's growth.

Benefits and Protection

Expected Growth: 5.8%

Principal Financial Group's 5.8% growth is driven by increasing demand for retirement and insurance products, expansion into emerging markets, and strategic acquisitions. Additionally, the company's diversified business model, strong brand recognition, and effective cost management contribute to its growth momentum.

Principal Asset Management

Expected Growth: 6.2%

Principal Asset Management's 6.2% growth is driven by its diversified investment offerings, strong distribution network, and increasing demand for retirement solutions. The company's ability to adapt to changing market conditions, expand its global footprint, and leverage its parent company's resources have also contributed to its growth.

Exceptional Items

Expected Growth: 0%

Principal Financial Group's exceptional items growth is stagnant at 0%. This is attributed to the absence of significant one-time gains or losses, stable operating expenses, and a lack of material impairments or divestitures. The company's consistent investment performance and steady fee-based revenue streams have also contributed to the flat growth in exceptional items.

Reconciling Items

Expected Growth: 0%

Principal Financial Group, Inc. has stagnant growth due to intense competition in the insurance industry, lack of innovation in product offerings, and high operating expenses. Additionally, the company's reliance on traditional distribution channels and limited digital presence hinder its ability to attract new customers, resulting in zero growth.

Corporate Segment

Expected Growth: 5.2%

The 5.2% growth in Principal Financial Group's Corporate Segment is driven by increasing demand for retirement and employee benefit solutions, expansion of voluntary benefits offerings, and strategic acquisitions. Additionally, the segment benefits from a strong brand reputation, diversified product portfolio, and effective cost management.

7. Detailed Products

Retirement Solutions

Principal Financial Group offers a range of retirement plans, including 401(k), 403(b), and IRA plans, to help individuals and employers save for retirement.

Insurance Solutions

Principal Financial Group offers a range of insurance products, including life insurance, disability insurance, and long-term care insurance, to help individuals and families protect their financial well-being.

Investments

Principal Financial Group offers a range of investment products, including mutual funds, exchange-traded funds (ETFs), and variable annuities, to help individuals and institutions grow their wealth.

Group Benefits

Principal Financial Group offers a range of group benefits, including life insurance, disability insurance, and accidental death and dismemberment insurance, to help employers attract and retain top talent.

Executive Benefits

Principal Financial Group offers a range of executive benefits, including non-qualified deferred compensation plans and supplemental executive retirement plans, to help employers attract and retain top executive talent.

8. Principal Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Principal Financial Group, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified product offerings and strong brand recognition.

Bargaining Power Of Customers

Principal Financial Group, Inc. has a large and diversified customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often tailored to meet the specific needs of its customers, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

Principal Financial Group, Inc. has a diversified supply chain and is not heavily dependent on a single supplier. The company's scale and financial resources also give it significant bargaining power over its suppliers.

Threat Of New Entrants

The financial services industry is heavily regulated, and new entrants would face significant barriers to entry, including high capital requirements and the need for regulatory approvals. Principal Financial Group, Inc.'s established brand and distribution network also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The financial services industry is highly competitive, and Principal Financial Group, Inc. faces intense competition from established players and new entrants. The company must continually innovate and invest in its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.78%
Debt Cost 3.95%
Equity Weight 73.22%
Equity Cost 10.15%
WACC 8.49%
Leverage 36.57%

11. Quality Control: Principal Financial Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.13$

Current Price

89.14$

Potential

-0.00%

Expected Cash-Flows