Yahoo Finance Principal Financial Group Inc's Dividend Analysis
Exploring the Sustainability and Growth of Dividends
Introduction to Principal Financial Group Inc's Dividend
Principal Financial Group Inc (NASDAQ:PFG) recently announced a dividend of $0.71 per share, payable on 2024-06-27, with the ex-dividend date set for 2024-06-03. 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. These include retirement, asset management, and insurance through its 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 generates 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, distributing dividends on a quarterly basis. Since 2008, the company has increased its dividend each year, earning it the status of a dividend achiever. This designation is reserved for companies that have increased their dividend annually for at least the past 16 years.
Breaking Down Principal Financial Group Inc's Dividend Yield and Growth
Currently, Principal Financial Group Inc boasts a 12-month trailing dividend yield of 3.23% and a forward dividend yield of 3.46%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, the annual dividend growth rate was 5.10%, which slightly decreased to 4.80% over a five-year period. Over the past decade, the annual dividends per share growth rate stands impressively at 9.40%.
Based on the current dividend yield and five-year growth rate, the 5-year yield on cost for Principal Financial Group Inc stock is approximately 4.08%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio, which stands at 2.02 as of 2024-03-31, provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. However, this may suggest that the company's dividend may not be sustainable.
Principal Financial Group Inc's profitability rank is 5 out of 10, indicating fair profitability. The company has reported positive net income consistently over the past decade, further solidifying its financial health.
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, though it underperforms compared to approximately 59.95% of global competitors. Its 3-year EPS growth rate and 5-year EBITDA growth rate also show potential for sustaining dividends in the long run, despite underperforming some global competitors.
Conclusion: Evaluating Dividend Sustainability and Growth Prospects
In conclusion, while Principal Financial Group Inc demonstrates a robust track record of increasing dividends, the sustainability of future dividends will depend heavily on maintaining profitability and growth metrics. Investors should keep an eye on these factors when considering the stock for long-term income generation. For further exploration of high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
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.
