On Dec 23, 2013, shares of
Prudential Financial, Inc.
) hit a 52-week high of $92.18. The momentum was driven by strong
results so far this year, the recent dividend hike and an
improving operating environment.
Prudential has a well diversified business profile with reach
in different markets and a broad product portfolio. The company
is set to benefit from the aging American population, which will
create a huge demand for retirement benefits products as baby
boomers enter retirement.
A significant reach in international markets is another
differentiator for the company.
A gradually recovering economy and an increasing interest rate
environment also bode well for the company.
This Zacks Rank #2 (Buy) life insurer boasts of solid asset
quality, and overall sound capital position, liquidity and
financial flexibility, which drives credit rating agencies to
give it a strong credit score.
Prudential has also witnessed an uptick in its Zacks Consensus
Estimates. Over the past 60 days, all of the estimates moved
north by 10.1% to $9.70 per share. The same for 2014 went
up 1.6% to $9.22 per share as 11 of 16 estimates were raised. The
expected long term growth rate for the stock is about 14.2%.
Valuation for Prudential also looks attractive. The shares are
trading at 35% discount to the industry average on a forward
price-to-earnings basis and 24% discount to a price-to-book
basis. With Return on equity 43.7% higher than the industry
average, this stock looks undervalued.
Other stocks within our coverage
CNO Financial Group
Old Republic International Corp.
) all carrying Zacks Rank #1 (Strong Buy) are worth
CNO FINL GRP (CNO): Free Stock Analysis
KEMPER CORP (KMPR): Free Stock Analysis
PRUDENTIAL FINL (PRU): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
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