Updated 3/13/25
Principal Financial Group isn’t a flashy name that dominates financial headlines, but that’s exactly why it stands out for income-focused investors. Headquartered in Des Moines, Iowa, Principal has been doing its thing for over a century—offering insurance, asset management, and retirement planning services to millions of clients around the world. It’s a solid, steady ship in the vast ocean of financial stocks.
For dividend investors, though, what really matters is whether this stock continues to deliver consistent income, offer safety, and quietly build value. Let’s take a walk through where the company stands today and what the key takeaways are for those looking to collect and reinvest those quarterly checks.
Recent Events
Over the past year, Principal has put up some surprising numbers. Revenue for the most recent twelve months came in at $16.13 billion, showing a sharp rise from the prior year. That jump—76.6% year-over-year—isn’t something you see every day in this space. Some of it stems from market-based factors and accounting adjustments, but there’s also clear underlying strength in operations.
On the profitability front, net income sits at $1.57 billion, and EPS came in at $6.68. More importantly for dividend investors, operating cash flow hit $4.6 billion. That’s real money that supports ongoing dividend payments, not just accounting profits.
With $5.27 billion in cash versus $4.66 billion in debt, the company is in a healthy position. That balance sheet strength gives it flexibility no matter what the broader market throws its way. Institutional ownership remains high, at over 73%, showing strong conviction from the big players.
Key Dividend Metrics
📈 Forward Dividend Yield: 3.60%
💸 Annual Dividend Rate (Forward): $3.00
📅 Next Dividend Payment: March 28, 2025
🧮 Payout Ratio: 42.66%
📉 5-Year Average Yield: 3.78%
📊 Current Yield (Trailing): 3.42%
📆 Ex-Dividend Date: March 12, 2025
Dividend Overview
Principal’s dividend isn’t going to set records, but it does exactly what most investors want—it’s steady, predictable, and well-supported by earnings. At a 3.60% forward yield, it provides a healthy income stream that doesn’t stretch the balance sheet or force the company into risky territory.
The company’s current payout ratio, just under 43%, leaves room for future growth while offering a nice buffer in case of an economic slowdown. This is the kind of dividend that’s built on fundamentals, not wishful thinking.
Dividend Growth and Safety
While Principal doesn’t have a track record of aggressive dividend hikes, its approach has been disciplined and sustainable. Over the past five years, the average yield has held fairly steady, just under 4%. That consistency matters more than flashy growth for many income investors.
There’s also strong support from cash flows. With levered free cash flow of $1.3 billion and solid profitability metrics, the company has breathing room. Even if the business faced a few rough quarters, the dividend would likely be protected.
This is especially comforting in sectors like insurance and asset management, where earnings can sometimes swing with the markets. Principal’s diversified model and conservative financial management give investors reason to stay confident.
Chart Analysis
Price Action and Moving Averages
Looking at Principal Financial Group’s (PFG) chart through mid-March 2025, the stock has been moving in a wide sideways range, marked by a few sharp dips and rallies. Currently, it’s trading just above the 200-day simple moving average, which is flattening out around the $82 mark. The 50-day moving average recently crossed below the 200-day—a bearish crossover known as a death cross. While this can sometimes signal extended downside, the price hasn’t broken down significantly since the crossover.
Instead, price seems to be hovering around this key area, almost like it’s trying to decide whether to hold or lose support. The latest close at $82.03 is just below the open, indicating some selling pressure throughout the day.
Volume Behavior
Volume hasn’t been particularly strong, with the latest daily activity sitting around 1.83 million shares, which is consistent with the 10-day average. What’s interesting is that spikes in volume earlier this year aligned with temporary price rallies, suggesting short bursts of bullish interest—but none strong enough to sustain a clear breakout.
Most volume bars recently are mixed in color, showing indecision. That fits with the broader sideways action in the stock. Nothing in volume suggests major accumulation or distribution at the moment.
RSI and Momentum
The Relative Strength Index (RSI) has been gradually declining over the past few weeks and now hovers in neutral territory, far from overbought or oversold. It had been closer to the 70 level in late February during that bounce above $86, but since then, momentum has cooled off.
RSI trending lower without reaching oversold could mean sellers have had more control recently, but there’s no extreme pressure yet. It’s a soft drift, not a breakdown.
Recent Candlesticks
The last five candles tell a subtle but important story. There’s a pattern of lower highs forming, with long upper wicks on a couple of the candles—especially on the March 10 and March 12 sessions. That often signals sellers stepping in as price tries to rise. The body of the most recent candle is small and red, and it closed near the low of the day, which leans slightly bearish.
The lack of long lower wicks across the last few days also shows there hasn’t been strong buying interest on intraday dips. So while there isn’t panic selling, buyers don’t seem eager to jump in just yet.
Analyst Ratings
In recent months, Principal Financial Group (PFG) has seen a combination of analyst upgrades and downgrades, revealing some split sentiment across the board. The shifts have largely revolved around valuation, market positioning, and forward earnings expectations.
Upgrades
📈 JPMorgan
On January 7, 2025, JPMorgan raised its rating on PFG from “Neutral” to “Overweight” and nudged the price target to $92 from the prior $95. The upgrade was based on a few key factors—namely the company’s relatively low-risk liability structure, steady performance in its core businesses, and an attractive valuation relative to peers. Analysts also pointed out improved tailwinds for retirement and asset management flows heading into the second half of the year.
Downgrades
📉 Morgan Stanley
On December 5, 2024, Morgan Stanley moved PFG to “Underweight” from “Equalweight” and lowered its target price to $80 from $86. The decision came on the heels of what the firm described as stretched valuation metrics and potential headwinds in sustaining earnings growth. There was also concern about how higher capital requirements could affect long-term returns.
📉 Wells Fargo
Just a few days later, on December 11, 2024, Wells Fargo also shifted to a more cautious stance. The firm downgraded PFG to “Underweight” from “Equalweight” and trimmed the price target to $75 from $84. Analysts expressed skepticism about forward profit margins and suggested that near-term expectations might already be priced into the stock.
Consensus Price Target
🎯 The average 12-month price target for PFG currently stands at approximately $85.92. That implies a modest upside of around 3.2% from current levels. Among analysts covering the stock, price targets range from as low as $70 to as high as $99, showing a fairly wide spectrum of views.
While some are leaning into Principal’s defensive posture and consistent cash flows, others appear cautious on valuation and broader sector dynamics.
Earning Report Summary
Principal Financial Group kicked off 2024 with a solid first quarter, showing steady performance across the board. The company posted net income of $533 million, or $2.22 per share, while non-GAAP operating earnings came in at $394 million, or $1.65 per share. These numbers reflect the kind of dependable earnings base investors have come to expect from Principal.
One area that stood out was how committed the company continues to be in returning value to shareholders. They sent back a total of $362 million—$200 million went toward buying back stock and another $162 million was paid out as dividends. On top of that, they announced a slight bump in the dividend for the second quarter, raising it to $0.71 per share. That next payout is lined up for the end of June.
Assets under management also moved in the right direction, hitting $709 billion, while total assets under administration reached a massive $1.6 trillion. That growth helps reinforce Principal’s position as a major player in asset management. Financially, they remain in a strong spot, with $1.4 billion in excess and available capital—a healthy cushion for whatever comes next.
Digging into individual segments, the Retirement and Income Solutions unit saw $9.4 billion in sales, up 6% from the same time last year. Net revenue also rose by the same percentage, with a solid 38% operating margin, suggesting the business is running efficiently.
Their investment arm, Principal Global Investors, showed some positive momentum too. Managed assets grew to $514 billion, a 7% increase year over year. Institutional and real estate investments both saw positive cash flows, which is always a good sign of investor confidence.
The international side of the business also contributed, with assets under management climbing to $179 billion and net cash flows reaching $1 billion. That level of inflow points to solid demand across global markets.
CEO Dan Houston called attention to the company’s strong start to the year, noting a combination of focused execution, solid sales activity, and support from favorable market conditions. He emphasized the balance they’ve struck between investing in growth and keeping expenses under control, while still returning capital to shareholders.
All in all, the first quarter showed that Principal continues to do what it does best—run a steady, efficient business that stays focused on long-term value.
Financial Health and Stability
A look at the balance sheet paints a clear picture—Principal is in a stable place financially. Cash on hand exceeds debt, and the total debt-to-equity ratio of 40.61% is quite manageable. There’s no sign of overleveraging or financial engineering here.
Profit margins are also strong. Operating margin sits at 23.22%, which shows that the company is keeping costs in check and running efficiently. Return on equity, an important indicator for shareholders, comes in at 14.09%. That’s a healthy figure in the financials space and tells us the company is generating good value from its equity base.
Principal also maintains a current ratio of 1.44, indicating a solid ability to cover short-term obligations. From top to bottom, there’s a clear sense of discipline in how the company manages its resources.
Valuation and Stock Performance
Trading recently around $84.57, Principal is priced at 12.46 times trailing earnings, with a forward P/E of 10.00. These are reasonable valuations in a market that’s rewarding growth at all costs. For dividend-focused investors, that’s not necessarily a drawback. In fact, it may be a sign of underappreciated stability.
Book value per share is $49.01, and with a price-to-book ratio around 1.69, shares aren’t expensive relative to their equity base. While that’s a bit above average for the sector, it’s not out of line considering Principal’s earnings consistency and strong cash flows.
The stock has lagged slightly over the past year, down around 1.44%, while the broader market has gained. That underperformance could present an opportunity for investors who prioritize dividends over fast growth. With the 50- and 200-day moving averages sitting close to current levels, the stock seems to be consolidating, which may lead to a more stable price base going forward.
Risks and Considerations
Principal operates in areas that are tightly connected to broader market conditions. Volatility in equity and bond markets can affect its asset management and retirement businesses. Insurance, meanwhile, can be hit by unpredictable claims or changes in interest rates.
The stock also carries a slightly higher beta at 1.17, meaning it’s just a bit more volatile than the market average. That’s not a major concern, but for risk-averse income investors, it’s worth noting.
Regulatory shifts and competition in retirement services are ongoing risks as well. However, Principal’s diversified model and conservative approach give it more levers to pull than many of its peers if challenges arise.
Final Thoughts
Principal Financial Group doesn’t need to shout to be heard. It’s the kind of company that quietly rewards patient investors with steady income, strong financials, and just enough growth to keep things moving forward.
For dividend-focused investors, it checks many boxes—solid yield, reasonable payout ratio, consistent cash flow, and a conservative balance sheet. While the stock may not lead in a bull market rally, it’s likely to keep delivering in the form of reliable quarterly payouts.
In a market filled with uncertainty and noise, there’s something to be said for a business that keeps doing its job quarter after quarter. Principal may not be the most exciting name on the board, but for those who value dependable income, it’s worth a closer look.