July 04, 2025 a 12:47 pm
PFG: Dividend Analysis - Principal Financial Group, Inc.
Principal Financial Group, Inc. is a potential candidate for dividend investors seeking stable income. With a respectable dividend yield of 3.85% and a consistent dividend history of 24 years, the company shows a strong commitment to returning value to its shareholders. The absence of a cut or suspension in recent years reflects a reliable and stable dividend policy.
📊 Overview
The financial metrics provide a strong basis for evaluating Principal Financial Group's dividend appeal. With a dividend yield of 3.85% and a robust 24-year history of dividend payments, investors can expect a stable income stream. The sector classification and recent dividend metrics highlight the reliability and growth potential of this firm as a dividend-paying entity.
| Metric | Value |
|---|---|
| Sector | Financial |
| Dividend yield | 3.85% |
| Current dividend per share | 2.91 USD |
| Dividend history | 24 years |
| Last cut or suspension | None |
📈 Dividend History
Analyzing the dividend history is critical for understanding a company's payout consistency and reliability. It gives insight into management's dedication to maintaining and increasing dividends even during challenging times.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.51 |
| 2024 | 2.85 |
| 2023 | 2.60 |
| 2022 | 2.56 |
| 2021 | 2.44 |
📉 Dividend Growth
The growth rate of dividends signifies future cash flow predictability for shareholders, revealing the underlying profitability and strategic prudence of the company's operations.
| 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 indicate how well earnings support dividend payments. An ideal ratio ensures sustainability without compromising financial stability.
| Key figure | Ratio |
|---|---|
| EPS-based | 60.26% |
| Free cash flow-based | 13.24% |
The EPS payout ratio of 60.26% is on the higher side, reflecting adequate coverage from earnings. The FCF payout ratio of 13.24% indicates strong cash support for dividends, providing financial safety.
📊 Cashflow & Capital Efficiency
Evaluating cash flow and capital efficiency is essential for understanding the sustainability of dividends and assessing operational performance.
| 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 | 1.47% | 2.69% | 3.67% |
| Stock-based Compensation to Revenue | 0.67% | 0.73% | 0.52% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.50% | 97.31% | 96.33% |
The financial data shows robust cash flow generation, with a healthy Free Cash Flow Yield and efficient capital allocation, enhancing dividend safety presently.
🗣️ Balance Sheet & Leverage Analysis
Balance sheet health determines financial stability and capability to withstand economic pressures influencing dividend agendas.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.37 | 0.37 | 0.41 |
| Debt-to-Assets | 1.31% | 1.31% | 1.35% |
| Debt-to-Capital | 27.04% | 26.78% | 28.96% |
| Net Debt to EBITDA | -0.05 | -0.71 | -0.12 |
| Current Ratio | 0.23 | 372.52 | 0.53 |
| Quick Ratio | 0.23 | 372.52 | 5.14 |
| Financial Leverage | 28.29 | 27.94 | 30.30 |
The leverage ratios offer a glimpse into the liquidity and capital positioning, wherein the overall debt remains managed, indicating a firm financial discipline conducive for sustained dividend policies.
📊 Fundamental Strength & Profitability
Fundamental metrics showcase the company's operational efficiency and earning capabilities, vital for dividend prospects.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 14.17% | 5.71% | 47.56% |
| Return on Assets | 0.50% | 0.20% | 1.57% |
| Margins: Net | 9.74% | 4.56% | 27.13% |
| Margins: EBIT | 11.72% | 5.41% | 34.14% |
| Margins: EBITDA | 13.31% | 7.40% | 35.83% |
| Margins: Gross | 45.59% | 43.17% | 62.98% |
| Research & Development to Revenue | 0 | 0 | 0 |
The margins and returns reveal strong profitability, with a focus on efficiency that underscores the sustainability of current and future dividend distributions.
📈 Price Development
✅ Dividend Scoring System
| Category | Score | |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
❗ Rating
Principal Financial Group demonstrates a solid dividend profile with excellent stability. While the growth is moderate, the comprehensive evaluation reveals a resilient financial structure supporting sustainable dividends. It is recommended for income-focused investors who prioritize stability over aggressive growth.