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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

Principal Financial Group's recent performance was driven by solid Q3 2025 results, with disciplined capital allocation and a 16-year dividend growth streak. The company targets 9%-12% annual non-GAAP EPS growth. Institutional investors, such as Capital Fund Management S.A. and Caxton Associates LLP, have shown confidence in the stock, with recent purchases of 18,711 and increased stakes by 112%, respectively. A $1.6 billion share buyback plan is expected next year, supporting a potential 28% total return by 2026, according to some analysts.

1.c. Company Highlights

2. Principal Financial Group's Strong 2025 Results and Promising 2026 Outlook

Principal Financial Group delivered a robust financial performance in 2025, with non-GAAP operating earnings reaching $1.9 billion, or $8.55 per diluted share, representing a 12% increase in EPS over 2024. The company's adjusted non-GAAP earnings per share growth was 12%, at the high end of its target range. For the fourth quarter, non-GAAP operating earnings were $499 million, or $2.24 per diluted share, slightly missing estimates of $2.23 per share, while actual EPS came out at $2.19. Revenue growth is expected to be around 4.9% next year, indicating a steady pace.

Publication Date: Feb -15

📋 Highlights
  • Strong Earnings Growth:: Adjusted non-GAAP EPS rose 12% in 2025 to $8.55, with $499M ($2.24/share) reported in Q4.
  • Shareholder Returns:: Returned $1.5B to shareholders in 2025, including $850M share repurchases and $685M dividends.
  • Retirement Business Momentum:: Total retirement transfer deposits hit $35B (+9% YoY), with DCIO sales reaching $8B and pension risk transfer sales totaling $3B across 70 cases.
  • 2026 Outlook:: Targets 9–12% EPS growth, 15–17% ROE, and 75–85% free cash flow conversion, with $1.5B–$1.8B capital deployments.
  • Margin Expansion:: Raised margin targets: RIS to 38–41%, Investment Management to 35–39%, and International Pension to 46–50%, driven by operational performance.

Segment-wise Performance

The retirement ecosystem delivered strong results, with total retirement transfer deposits growing 9% year over year to $35 billion. Workplace Savings and Retirement Solutions (WSRS) recurring deposits increased 5%, demonstrating the strength of the platform. Pension risk transfer sales totaled $3 billion across 70 cases, and DCIO sales reached nearly $8 billion. Global Asset Management also saw significant growth, with investment management gross sales reaching $127 billion and private markets AUM growing 12% year over year.

Valuation and Outlook

With a Price-to-Book Ratio of 1.72 and a Dividend Yield of 3.41%, Principal Financial Group appears to be reasonably valued. The company's outlook for 2026 is promising, with expected earnings per share growth between 9% to 12% and a return on equity target of 15% to 17%. The company's strong capital position, with $1.6 billion of excess available capital, and its commitment to returning excess capital to shareholders through share repurchases and dividends, are positives. As Joel Pitz mentioned, "We're revising several margin targets upward, driven by our businesses' performance," indicating a positive trajectory for the company's profitability.

Growth Prospects

Principal Financial Group is optimistic about its growth prospects, driven by new avenues of growth in investment management, such as committed transactions and new diligence activity in European real estate. The company is also seeing growth in its international wealth platform. With a strong position in the retirement industry and a focus on competing in the marketplace, the company is well-positioned to deliver against its targets and create sustained long-term shareholder value.

3. NewsRoom

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Principal Financial Group, Inc. $PFG Shares Bought by American Century Companies Inc.

Mar -09

Source: defenseworld.net

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U.S. Businesses Signal Growth in Early 2026

Mar -05

Source: businesswire.com

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Here Are Wednesday’s Top Wall Street Analyst Research Calls: AbbVie, Angel Studios, First Solar, IBM, Kroger, Molson Coors, Oracle, Workday, and More

Feb -25

Source: 247wallst.com

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Principal Financial CEO Lifts ROE Target, Highlights SMB Growth and AI Push at BofA Conference

Feb -16

Source: defenseworld.net

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Illinois Municipal Retirement Fund Has $8.98 Million Holdings in Principal Financial Group, Inc. $PFG

Feb -14

Source: defenseworld.net

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Principal Financial Group, Inc. (PFG) Presents at Bank of America Financial Services Conference 2026 Transcript

Feb -11

Source: seekingalpha.com

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Principal Financial Group Inc (PFG) Q4 2025 Earnings Call Highlights: Strong EPS Growth and Strategic Divestitures Drive Performance

Feb -10

Source: gurufocus.com

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Principal Financial Group, Inc. (PFG) Q4 2025 Earnings Call Transcript

Feb -10

Source: seekingalpha.com

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

85.83$

Current Price

85.83$

Potential

-0.00%

Expected Cash-Flows