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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Principal Financial Group, Inc. (XNAS:PFG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PFG
Name:
PRINCIPAL FINANCIAL GROUP, INC. (XNAS:PFG)
Sector:
6.10M
Industry:
Insurance�Diversified
CEO:
Mr. Daniel Houston
Total Employees:
18,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -93.25% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PRINCIPAL FINANCIAL GROUP, INC.(PFG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�DIVERSIFIED INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
74.44
One Month Price Target:
$74.98
Six Month Price Target :
$77.68
Likely Price in One Year's Time:
Ticker:
$80.92
Likely Trading Range Today Under (Normal Volatility)
$74.14
Price Upper limit ($) :
$74.87
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$70.06
This week:
$64.65
This month :
$54.87
Other Primary facts
Market Cap:
18.55B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
249.24M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.56%
-17.55%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$94.74
$85.36
$54.14
$63.52
Medium risk (<10%) entry points
Buy Call
Sell Call
$82.31
Buy Put:
Sell Put:
$80.30
$66.55
$68.58
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PFG
Sharpe Ratio:
2.80%
Comparison:
PFG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 14.24% higher than the industry
& ratio is 22.73% higher than the market/S&P 500 average
Average Returns/Yield of
PFG
Daily returns:
0.09%
Weekly returns:
0.45%
Monthly returns:
1.80%
Yearly returns:
19.61%
Comparison of returns:
Average annual returns/yield (last 3 years) is 10.36% above industry average
Classification:
PFG, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.28
Statistical test of Returns:
PFG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.91%
Weekly Volatility:
6.50%
Monthly Volatility:
13.00%
Yearly Volatility:
45.03%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.26%
Volatility in last five trading days has been -90.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.88%
Weekly VaR:
-13.15%
Monthly VaR:
-26.29%
How Much Can the price of
PFG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-91.08%
This translates to price declining to:
$57.90
This translates to price declining to:
$6.64
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PFG is a 85.58% riskier investment compared to the market/S&P 500 & is 58.98% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -5.23% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PFG
Beta in relation to market/S&P 500--1.30
Expected beta in 1 year's time:
0.819
Expected beta in 3 year's time:
1.158
Unlevered (debt free) Beta:
0.991
Beta in relation to Nasdaq (XNAS):
0.925
Beta in relation to all global stocks::
1.017
Beta Comparison & Analysis
Beta of competitors/peers::
1.081
Beta is 19.89% higher than peers
Average Industry Beta:
1.088
Beta is 19.06% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.94%
Sustainable growth rate is -92.42% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.096
Alpha is 6.77% above industry average alpha yield
Alpha is 612% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PFG
Equity cost of capital:
0.120
Equity cost of capital is 13.40% above industry mean WACC
Unlevered (without debt) cost of capital:
9.20%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$56.83
Revenue growth rate per share of (3Y):
1.55
Annual revenue growth rate is -76.96% below industry average
EPS:
$5.82
Expected Annual growth rate of EPS (3Y):
7.84%
Expected future EPS growth rate is 46.25% higher than the Insurance�Diversified industry
Free cash flow (FCF) per share:
$11.31
Balance sheet equity growth per share: 17.36%
Equity growth rate per share is -56.67% lower than the industry
Debt per share
$17.17
EBITDA per share
$8.51
Valuation Analysis Today of
PFG
P/E Ratio:
4.53
P/E Ratio of Competitors/Peers:
23.47
P/E ratio is -80.71% lower than main peers & is -92.34% lower than the industry
Stock price/value with industry average P/E ratio: $343.96
PFG is -78.36% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $36.50
Present value of the expected future dividends only: $24.75
P/S (Price to Sales ratio):
1.31
Price to sales ratio is -53.93% below the industry mean
P/B (Price to book value ratio):
1.55
Price to free cash flow: 6.58
-
Net income growth rate (3Y):
18.80%
Net income growth rate is -100.07% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 10.64%
Dividend yeild: 3.43%
Previous Dividend: $0.64
Previous adjusted dividend: $0.64
Previous Dividend: $2.55
Expected next dividend best case: $0.67
Expected next dividend worst case: $0.61
Average dividend payment (long-term): $0.59
Average dividend increase/decrease (growth rate) % per period: 1.56%
Expected next dividend payment date: 22/09/2022
Expected next dividend record date: 31/08/2022
-
Previous dividend payment date: 24/06/2022
Previous dividend record date: 06/02/2022
-
Dividend History:
2022-06-01--$0.64
2021-11-30--$0.64
2021-06-02--$0.61
2022-03-09--$0.64
2021-08-31--$0.63
2021-02-26--$0.56
Dividend growth rate is -86.41% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
35.98%
Net debt to equity ratio:
15.29%
Debt to assets ratio:
1.47%
Net debt to assets ratio:
0.62%
Debt-to-asset ratio is -98.45% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-0.09%
Annual debt growth is -92% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.01%
Analysis of Key Statistics
Correlation of price movement with the market:
0.742
Statistical significance of correlation:
PFG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.59
Stock price is 25.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.59
Correlation of price movement with Nasdaq (^IXIC):
0.044
Covariance of price movement with the market:
0.075
Kurtosis
11.174
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.316
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PFG
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
14.71%
Operating profit margin is 159.68% higher than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
14.54%
Effective tax rate is -32.40% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.19%
Return on equity (ROE) is -171.13% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.54%
Return on assets (ROA) is -66.36% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
23.47
Current ratio is 0.00% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 3.2 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
761.5K
Each employee generates -27% less revenue than industry average revenue per employee
EBITDA generated per employee:
114.0K
Each employee generates -48% less EBITDA than industry average revenue per employee
Profit generated per employee:
84.4K
Each employee generates -40% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.3K
Each employee generates -104% less free cash flow than industry average revenue per employee
Assets/Capital per employee
4.2M
Each employee generates -104% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PFG
FIFTH THIRD BANCORP (XNAS:FITBI)
TRADEWEB MARKETS INC. (XNAS:TW)
CINCINNATI FINANCIAL CORPORATION (XNAS:CINF)
THE CARLYLE GROUP INC. (XNAS:CG)
ARCH CAPITAL GROUP LTD. (XNAS:ACGL)
CMLFU
TMTSU
ANZU SPECIAL ACQUISITION I UNT (XNAS:ANZUU)
XP Inc. (XNAS:XP)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�25%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
14.16B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
4.09B
-
2.46B
2.46B
-
4.99B
4.99B
-
-
275.30M
2.12B
2.08B
1.57B
1.90B
275.90M
1.57B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
-
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
31.50M
Net Cash Provided by Operating Activities:
31.50M
Investments in PP&E:
- 25400.00K
Net Acquisitions:
-
Purchases of Investments:
- 5453000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.74B
71.41B
74.15B
2.37B
-
-
-
1.02B
1.66B
1.60B
74.09B
-
-
78.37B
369.91B
291.54B
-
279.40M
34.70M
-
-
279.40M
4.28B
-
5.65B
284.96B
279.59B
4.90M
13.09B
- 1920600.0K
-
March 31, 2022 at 6:00:00 AM
12.27B
11.90B
291.48B
145.50B
4.56B
1.8B
6.40B
- 799400.00K
126.80M
- 500.00K
19.60M
- 894100.00K
- 167000.00K
1.29B
250.90M
-
409.20M
2.74B
2.33B
31.50M
- 25400.00K
6.10M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PFG
2023
2024
2025
2026
2027
$94.50
$102.72
$111.67
$121.39
$131.96