On Dec 23, 2013, shares of Prudential Financial, Inc. (PRU) hit a 52-week high of $92.18. The momentum was driven by strong results so far this year, the recent dividend hike and an improving operating environment.
Prudential has a well diversified business profile with reach in different markets and a broad product portfolio. The company is set to benefit from the aging American population, which will create a huge demand for retirement benefits products as baby boomers enter retirement.
A significant reach in international markets is another differentiator for the company.
A gradually recovering economy and an increasing interest rate environment also bode well for the company.
This Zacks Rank #2 (Buy) life insurer boasts of solid asset quality, and overall sound capital position, liquidity and financial flexibility, which drives credit rating agencies to give it a strong credit score.
Prudential has also witnessed an uptick in its Zacks Consensus Estimates. Over the past 60 days, all of the estimates moved north by 10.1% to $9.70 per share. The same for 2014 went up 1.6% to $9.22 per share as 11 of 16 estimates were raised. The expected long term growth rate for the stock is about 14.2%.
Valuation for Prudential also looks attractive. The shares are trading at 35% discount to the industry average on a forward price-to-earnings basis and 24% discount to a price-to-book basis. With Return on equity 43.7% higher than the industry average, this stock looks undervalued.
Other stocks within our coverage Kemper Corp. (KMPR), CNO Financial Group (CNO) and Old Republic International Corp. (RLI) all carrying Zacks Rank #1 (Strong Buy) are worth considering.Read the Full Research Report on RLI
Read the Full Research Report on CNO
Read the Full Research Report on PRU
Read the Full Research Report on KMPR
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