The Principal Financial Group, Inc. : PFG-US: Dividend Analysis : September 01st, 2017 (record date) : By the numbers : September 25, 2017

Our analysis is based on comparing The Principal Financial Group, Inc. with the following peers – CNO Financial Group, Inc., Cigna Corporation, Aflac Incorporated, Assurant, Inc. and AEGON N.V. ADR (CNO-US, CI-US, AFL-US, AIZ-US and AEG-US).

The Principal Financial Group, Inc.’s dividend yield is 2.87 percent and its dividend payout is 39.77 percent. This compares to a peer median dividend yield of 2.15 percent and a payout level of 26.57 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 67 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to June 30, 2017), PFG-US paid a low quality dividend, which represents a yield of 2.77% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was medium quality.
  • The ending cash balance, with a dividend coverage of 3.98x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2017), PFG-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.06x), investing cash flow (coverage of -7.90x), issuance cash flow (coverage of 1.34x) and twelve-month prior cash (coverage of 4.47x), for a total dividend coverage of 4.98x.

PFG-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.26x) and net share buybacks (coverage of -0.19x). Thus, the total coverage including share buybacks is 5.17x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 2.76 1.98 2.47 3.36 2.79 2.87
Dividend Payout (%) 30.35 33.22 35.07 36.95 35.78 39.77

A complete list of metrics and analysis is available on the company page.

Company Profile

The Principal Financial Group, Inc. is a global financial company, which offers businesses, individuals and institutional clients financial products and services. It specializes in retirement solutions, insurance, and investment products through the company’s diverse family of financial services companies and national network of financial professionals. It operates its business through following segments: Retirement and Income Solutions, Principal Global Investors, Principal International, U.S. Insurance Solutions and Corporate. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The Principal Global Investors segment provides asset management services to asset accumulation business, insurance operations, corporate segment and third party clients and also refers to mutual fund business. The Principal International segment relates tor the operations in Latin America including Brazil, Chile, and Mexico, and Asia which comprised of China, Hong Kong, India and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits insurance, which consists of group dental and vision insurance, individual and group disability insurance, group life insurance and non-medical fee-for-service claims administration, and individual life insurance throughout the United States. The Corporate segment manages the assets representing capital that has not been allocated to any other segment. The company was founded by Edward A. Temple in 1879 and is headquartered in Des Moines, IA.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.