Principal Financial Group Inc's Dividend Analysis
Assessing the Sustainability and Growth of PFG's Dividends
Principal Financial Group Inc (NASDAQ:PFG) recently announced a dividend of $0.69 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-11. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Principal Financial Group Inc's dividend performance and assess its sustainability.
What Does Principal Financial Group Inc Do?
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Principal Financial Group Inc is a leader in global investment management, offering businesses, individuals, and institutional clients a wide range of financial products and services. Its offerings include retirement, asset management, and insurance through a diverse family of financial services companies. It operates in four business segments: Retirement and Income Solutions, Principal Global Investors, Principal International, and United States Insurance Solutions. The company receives maximum revenue in the form of premiums.
A Glimpse at Principal Financial Group Inc's Dividend History
Principal Financial Group Inc has maintained a consistent dividend payment record since 2002, with dividends currently distributed on a quarterly basis. Since 2008, the company has increased its dividend each year, earning the status of a dividend achievera title given to companies with at least 16 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Principal Financial Group Inc's Dividend Yield and Growth
As of today, Principal Financial Group Inc boasts a 12-month trailing dividend yield of 3.25% and a 12-month forward dividend yield of 3.45%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, the annual dividend growth rate was 5.10%, which slowed to 4.80% per year over five years. However, over the past decade, the annual dividends per share growth rate stands at an impressive 9.40%. Consequently, the 5-year yield on cost for Principal Financial Group Inc stock is approximately 4.11% as of today.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Principal Financial Group Inc's dividend payout ratio is currently at 1.04 as of 2023-12-31, which may suggest concerns regarding sustainability. Additionally, Principal Financial Group Inc's profitability rank is 5 out of 10, indicating fair profitability. The company has also reported positive net income each year for the past decade, further solidifying its financial strength.
Growth Metrics: The Future Outlook
Principal Financial Group Inc's growth rank of 5 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, although its average annual revenue growth of 1.60% underperforms 60.43% of global competitors. The 3-year EPS growth rate reflects an average annual increase of 9.10%, underperforming 48.9% of global competitors. Lastly, the 5-year EBITDA growth rate of 15.70% underperforms 29.34% of global competitors.
Conclusion: Evaluating Principal Financial Group Inc's Dividend Outlook
In conclusion, while Principal Financial Group Inc has a commendable history of consistent and growing dividends, the current payout ratio and mixed growth metrics warrant a cautious approach. Investors should consider these factors alongside the company's fair profitability and dividend yield when evaluating the long-term sustainability of its dividends. For those seeking high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover potential investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
