June 09, 2025 a 03:31 pm
PFG: Dividend Analysis - Principal Financial Group, Inc.
The Principal Financial Group, Inc. offers a compelling dividend investment opportunity due to its steady dividend growth and strong financial fundamentals. With a 3.85% dividend yield and a history of 24 years of distributions, PFG showcases a solid commitment to shareholder returns. However, the low dividend growth rates may suggest cautious expansion strategies or reinvestment avenues. The firm's strategic position within its sector and financial consistency underpin its investment appeal.
📊 Overview
The firm's sector, divined yield, current dividend per share, and consistency over the years form the backbone of its dividend profile.
| Category | Data |
|---|---|
| Sector | Financials |
| Dividend Yield | 3.85 % |
| Current Dividend Per Share | 2.91 USD |
| Dividend History | 24 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
An understanding of the historical dividend payments offers insights into a company's commitment to rewarding its shareholders consistently.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.51 |
| 2024 | 2.85 |
| 2023 | 2.60 |
| 2022 | 2.56 |
| 2021 | 2.44 |
📈 Dividend Growth
Understanding dividend growth is essential as it indicates how well a company can enhance shareholder value over time.
| 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
Payout ratios serve as a critical measure of a company's dividend sustainability compared to its earnings and cash flows.
| Key Figure | Ratio |
|---|---|
| EPS-based | 60.26 % |
| Free cash flow-based | 13.24 % |
The 60.26 % EPS payout ratio is manageable, indicating moderately conservative payout policies constraining potential growth reinvestment.
📊 Cashflow & Capital Efficiency
Analyzing cash flow yields and capital efficiency highlights a firm's operational strength and potential for reinvestment.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 25.89 % | 19.84 % | 14.51 % |
| Earnings Yield | 8.97 % | 3.35 % | 22.57 % |
| CAPEX to Operating Cash Flow | 1.49% | 2.69% | 3.67% |
| Stock-based Compensation to Revenue | 0.67% | 0.73% | 0.52% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.51% | 97.31% | 96.33% |
The cash flow stability indicates robust operational frameworks, yet capital investment allocations remain essential for sustainable growth.
📊 Balance Sheet & Leverage Analysis
A company's leverage position and liquidity highlight its capacity to meet long-term obligations and manage short-term liabilities effectively.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.3705 | 0.3657 | 0.4077 |
| Debt-to-Assets | 0.0131 | 0.0131 | 0.0135 |
| Debt-to-Capital | 0.2704 | 0.2678 | 0.2896 |
| Net Debt to EBITDA | 0.3871 | 0 | -0.1226 |
| Current Ratio | 0.2306 | 372.53 | 0.5319 |
| Quick Ratio | 0.2306 | 5.14 | 5.14 |
| Financial Leverage | 28.29 | 27.94 | 30.30 |
The analysis reveals a relatively balanced leverage strategy with adequate liquidity levels, though the firm could explore optimizing asset utilization.
📊 Fundamental Strength & Profitability
Measuring profitability ratios reflects the company's ability to generate returns relative to equity and assets, fundamental to gauging financial health.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 14.17% | 5.71% | 47.56% |
| Return on Assets | 0.50% | 0.20% | 1.57% |
| Net Margin | 9.74% | 4.56% | 27.20% |
| EBIT Margin | -1.59% | -1.99% | 34.23% |
| EBITDA Margin | 0% | 0% | 35.93% |
| Research & Development to Revenue | 0% | 0% | 0% |
Despite fluctuations in profitability metrics illustrating cyclical pressures, Principal Financial's intrinsic firm potential underlines a valid investment case.
📉 Price Development
✅ Dividend Scoring System
| Category | Rating | Score |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 3 |
Total Score: 32/40
⚠️ Rating
With a thorough analysis of Principal Financial Group, Inc.'s dividend policies and underlying fundamentals, the company scores favorably. The attractive dividend yield and consistent dividend payments, coupled with robust cash flow ratios, position PFG as a prudent choice for income-focused investors. Potential upsides exist with improved strategic growth and effective leverage reduction efforts. Thus, PFG earns a confident recommendation for investors seeking steady dividend income within the financial sector.