Principal Financial Trades Above 200-Day SMA: Time to Hold PFG Stock?

Core Insights - Principal Financial Group, Inc. (PFG) is currently trading above its 200-day simple moving average, indicating a short-term bullish trend, with a share price of $80.84, down 12.1% from its 52-week high of $91.98 [1] Price Performance - PFG shares have gained 4.4% year to date (YTD), underperforming the industry return of 7%, the Finance sector's return of 12.5%, and the Zacks S&P 500 composite's return of 9.8% [4][7] - The average number of shares traded in the last three months was 1.2 million, with a market capitalization of $18 billion [3] Valuation - PFG's shares are trading at a price-to-earnings multiple of 9.13, which is higher than the industry average of 9.04, and more expensive compared to peers like Enact Holdings, Inc., Everest Group, Ltd., and Radian Group Inc. [8] Growth Projections - The Zacks Consensus Estimate for PFG's 2025 earnings per share indicates an 18.3% year-over-year increase, with revenues projected at $15.86 billion, reflecting a 1.4% year-over-year improvement [9] - For 2026, earnings per share and revenues are expected to increase by 11.2% and 7.1%, respectively, from the 2025 estimates [9] Target Price - The Zacks average price target for PFG, based on short-term price targets from 13 analysts, is $85.77 per share, indicating a potential upside of 6.48% from the last closing price [10] Revenue Growth Factors - PFG is expected to see long-term revenue growth driven by higher premiums, fees, and improved net investment income across its segments [12] - The company benefits from its leadership in retirement and long-term savings, group benefits, and global asset management, which supports solid operating earnings [13] Specialty Benefits Insurance - The Specialty Benefits Insurance business is projected to benefit from record sales, strong retention, and employment growth, contributing positively to pre-tax operating earnings [14] Capital Position and Deployment - PFG has a strong capital position with sufficient cash generation capabilities, targeting $1.4 billion to $1.7 billion in capital deployments for 2025, including 35-45% of net income for share buybacks and about 10% for strategic M&A activities [16][18] Dividend Distribution - PFG raised its dividend for the seventh consecutive quarter in Q2 2025, aligning with a targeted 40% dividend payout ratio, reflecting a 7% increase over the year-ago quarter and a solid dividend yield of 3.7%, higher than the industry average of 2.7% [17]