April 10, 2025 a 02:43 pm
Dividend Analysis - Principal Financial Group, Inc.
Principal Financial Group, Inc. exhibits a solid dividend history with a current dividend yield of 3.55%, showcasing its commitment to returning value to shareholders. With consistent dividend payments over the past 24 years and no recent cuts or suspensions, their focus on dividend stability is clear. Despite a high EPS-based payout ratio, the free cash flow-based payout is more sustainable, indicating room for maintaining dividends.
Overview 📊
Principal Financial Group operates in the diversified financial sector, reflecting its role in providing comprehensive financial services. The following data provides a snapshot of its dividend profile:
| Detail | Data |
|---|---|
| Sector | Diversified Financial |
| Dividend Yield | 3.55% |
| Current Dividend Per Share | 11.66 USD |
| Dividend History | 24 years |
| Last Cut or Suspension | None |
Dividend History 🗣️
The history of consistent dividend payments underlines the company's strong commitment to its shareholders. Understanding this history is key for evaluating reliability and future potential. Consistent dividends enhance investor loyalty and indicate a company's robust cash flow position.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.75 |
| 2024 | 2.85 |
| 2023 | 2.60 |
| 2022 | 2.56 |
| 2021 | 2.44 |
Dividend Growth 📈
Dividend growth provides insight into a company's future earnings potential and management's confidence in future cash flows. The calculated growth percentage reflects the company's operational effectiveness and revenue anticipation.
| Time | Growth |
|---|---|
| 3 years | 5.31% |
| 5 years | 5.51% |
The average dividend growth is 5.51% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio ✅
The payout ratio is crucial as it reveals how much of a company's earnings are being returned to shareholders as dividends. It can assist in determining sustainability.
| Key Figure | Ratio |
|---|---|
| EPS-based | 172.17% |
| Free Cash Flow-based | 58.00% |
While the EPS-based payout ratio is concerning, suggesting dividends exceed earnings, the free cash flow-based ratio at 58% indicates dividends are mainly funded through stable cash flows.
Cashflow & Capital Efficiency 💰
Examining the cash flow and capital efficiency metrics offers insights into the operational effectiveness and financial health of a company.
| Metric | 2024 | 2023 |
|---|---|---|
| Free Cash Flow Yield | 27.00% | 19.84% |
| Earnings Yield | 9.10% | 3.35% |
| CAPEX to Operating Cash Flow | 1.49% | 2.69% |
| Stock-based Compensation to Revenue | 0.35% | 0.73% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.51% | 97.31% |
The company's cash flow is stable, presenting a reliable capital efficiency with consistent returns over the years.
Balance Sheet & Leverage Analysis 📉
Understanding the balance sheet metrics is vital in assessing the financial leverage and overall stability of the company.
| Metric | 2024 | 2023 |
|---|---|---|
| Debt-to-Equity | 0.37 | 0.37 |
| Debt-to-Assets | 0.01 | 0.01 |
| Debt-to-Capital | 0.27 | 0.27 |
| Net Debt to EBITDA | -0.16 | 0 |
| Current Ratio | 0.23 | 372.53 |
| Quick Ratio | 0.23 | 372.53 |
| Financial Leverage | 28.29 | 27.94 |
The leverage metrics suggest a well-managed financial structure, emphasizing prudent borrowing and asset management.
Fundamental Strength & Profitability 🔍
Evaluating profitability ratios contributes to understanding the company's operational effectiveness and value creation capability.
| Metric | 2024 | 2023 |
|---|---|---|
| Return on Equity | 14.17% | 5.71% |
| Return on Assets | 0.50% | 0.20% |
| Margins: Net | 9.74% | 4.56% |
| Margins: EBIT | -1.59% | -1.99% |
| Research & Development to Revenue | 0% | 0% |
Despite fluctuations, profitability remains healthy with solid equity returns, indicating effective management and performance.
Price Development 📈
Dividend Scoring System 🌟
| Category | Score | |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 29/40
Rating 🏅
Principal Financial Group, Inc. demonstrates commendable dividend sustainability and financial stability. While some concerns exist around the high EPS-based payout ratio, the company's strong cash generation and dividend continuity bolster its investment appeal. I recommend Principal Financial Group, Inc. as a stable option for dividend-focused portfolios, with room for growth as the firm strategically adjusts payout dynamics.