Principal Financial Announces $250M Share BuyBack Program – May 18, 2017


The board of directors of Principal Financial Group, Inc. (PFG Free Report) recently authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $250 million to repurchase its common stock.

As of Mar 31, 2017, the company is left with about $100 million under the $400 million share buyback program approved on Feb 23, 2016. With the new authorization, the company now has $350 million left under the buyback program.

The investment manager remains focused in boosting shareholders’ value through share repurchases and dividends. The company’s solid operational performance should support these endeavors. Notably, the company anticipates capital deployment between $800 million and $1.1 billion (via quarterly dividends, strategic acquisitions and share buy backs) in 2017. To that end, the company deployed $248 million of capital in the first quarter of 2017, which included $130 million in dividends and $118 million in share buy backs.

Principal Financial is confident about its capital deployment capabilities. This balanced approach to capital deployment supports the company’s diversified and integrated businesses, meets the needs of clients and creates long-term shareholder value.

Share repurchases benefit the company’s earnings per share, book value as well as shareholder equity as shares outstanding reduce. Therefore, share repurchase programs raise optimism among investors and boost their confidence on the stock.

Share Price Movement

Shares of Principal Financial lost 5.80% since the release of first-quarter 2017 results, underperforming the Zacks categorized Financial – Investment Management industry’s decline of 3.82%. However, we expect growth in both top line and bottom line, along with higher net investment income, strong segmental performance and robust capital position to help the stock to turn around in the near term.

Zacks Rank

Currently, Principal Financial holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks to Consider

Investors interested in other stocks from the finance sector can consider CNA Financial Corporation (CNA Free Report) , Fidelity National Financial, Inc. (FNF Free Report) and ProAssurance Corporation (PRA Free Report) . Each of these stocks holds a Zacks Rank #2 (Buy).

CNA Financial offers commercial P&C insurance products primarily in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 12.45%.

Fidelity National provides title insurance, and technology and transaction services to the real estate and mortgage industries in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 8.47%.

ProAssurance Corporation offers P&C insurance, and reinsurance products in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 16.59%.

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