Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Strong Operating Profit Margin
Robust Return on Equity
Excellent Liquidity Ratios
Minimal Debt Levels
🏆 Strong Leadership Transition
💪 Financial Strength and Flexibility
📈 Diverse Product Portfolio
🚀 Growth Targets and Strategic Investments
🌍 Expansion in International Markets
High Price-to-Free Cash Flow Ratio
Subpar Net Profit Margin
Zero Gross Profit Margin
Interest Coverage Ratio
⚠️ Adverse Underwriting Experience
🔄 Non-linear Growth Expectations
Prudential exhibits strong business quality with a solid leadership team, diverse product offerings, and significant financial strength. Future prospects are promising with ambitious growth targets and international expansion plans, although near-term challenges may affect growth consistency.
Analysis Date: February 5, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$294.17
Current Market Price: $95.75
IV/P Ratio: 3.07x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
67.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PRU
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (12.63)
P/B ratio ≤ 1.5 (1.24)
Current ratio ≥ 2.0 (8.63x)
Long-term debt < Net current assets (0.00x)
Margin of safety (67.0%)
PRU does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The operating profit margin stands at 45.77%, indicating efficient management of operating expenses relative to revenue.
With a return on equity of 9.61%, PRU shows a decent ability to generate profits from shareholders' equity.
The net profit margin of 3.87% is relatively low, indicating that a smaller portion of revenue translates into profit.
The gross profit margin of 0.0 suggests that PRU may not be generating profit from its core operations.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
9.61%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
-0.01%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
54.53%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
3.87%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
PRU's current ratio of 8.63 and quick ratio of 8.63 indicate exceptional liquidity, suggesting the company can easily cover its short-term liabilities.
With a debt-to-equity ratio of 0.034 and debt-to-assets ratio of 0.0013, PRU's financial leverage is very low, indicating strong financial health.
An interest coverage ratio of 0.0 suggests PRU may not be generating enough earnings to cover interest expenses, raising a concern about its financial flexibility.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.03x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
8.63x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Prudential has announced a smooth leadership transition with Andy Sullivan as the new CEO, indicating stability and confidence in the company's future direction. The leadership team has been actively engaged in setting and executing the company's strategy, which bodes well for continuity and future growth.
Prudential maintained a AA rating, reflecting a healthy capital position with over $4 billion in highly liquid assets. This strong financial footing allows for disciplined capital deployment and a robust risk management framework.
The company has diversified its product suite and expanded distribution capabilities to address various customer needs in investment, insurance, and retirement sectors, leading to robust sales across its retirement and insurance businesses.
The fourth quarter results were impacted by adverse underwriting experience due to elevated large individual life claims, indicating potential volatility in earnings due to unforeseen claims.
Prudential aims for annual core earnings per share growth of 5% to 8% through 2027, underpinned by significant growth in sales and flows across various business segments. The company also plans to maintain a disciplined approach to capital deployment while investing in growth opportunities.
Prudential is focused on expanding its international businesses, particularly in Japan and emerging markets like Brazil. It has seen strong sales from newly launched products in Japan and continues to diversify its offerings.
The anticipated growth may not be linear, as the company faces near-term headwinds from new business strains and runoff blocks, which could impact earnings volatility in the near future.