On Aug 19, 2014, shares of Principal Financial Group Inc . ( PFG ) scaled a 52-week high of $52.57 buoyed by a solid second-quarter earnings beat. With about 1.14 billion shares exchanging hands in the last trading session, shares closed at $52.24, gaining 0.5%.
The year-to-date return from the stock came in at 22.9%, which was ahead of the S&P's return of 19.7%. With respect to earnings performance, this investment manager has delivered positive surprises in all the last four quarters with an average beat of 7.2%.
In the second quarter, Principal Financial posted earnings of $1.08 per share that surpassed the Zacks Consensus Estimate by about 7% and improved nearly 19% year over year. Increased focus on fee-based businesses along with improved investment income drove the top line higher, and more than offset the increase in expenses thereby aiding solid earnings at the company. Its assets under management in the quarter were a record $517.9 billion as of Jun 30, 2014, up 15% year over year.
Backed by healthy earnings and a noble intention to share more profits with shareholders, Principal Financial increased its dividend by 6%. The company also regularly engages in share repurchases that in turn aid the bottom line. Principal Financial expects capital deployment in 2014 to be at or above the top end of the $500 - $700 million guidance range.
Riding on thesepositives, this Zacks Rank #2 (Buy) stock has been witnessing upward revisions in the Zacks Consensus Estimate in the last 30 days. For 2014, the Zacks Consensus Estimate for earnings moved north by 2.9% to $4.25 per share as 10 of 13 estimates were raised while for 2015, it scaled 2.0% to $4.49 as 8 of 13 estimates moved up. The expected long-term earnings growth is 11.7%.
Other Stocks to Consider
Principal Financial carries a Zacks Rank #2 (Buy). Investors interested in investment managers may also consider Ameriprise Financial, Inc. ( AMP ), The Blackstone Group L.P. ( BX ), Invesco Ltd. ( IVZ ). All these stocks hold the same Zacks Rank as Principal Financial.
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