Principal Financial Group Boosts Quarterly Dividend Payout 10 Consecutive Periods (PFG)
By: Ned Piplovic,
In addition to nine consecutive years of annual dividend hikes, Principal Financial Group, Inc. (NASDAQ:PFG) boosted its quarterly dividend payout over the past 10 consecutive quarters.
I say this because, in the first six months of 2018, the company’s share price fell nearly 30%. While a significant drop, PFG’s stock price fell more than 25% in early 2016, only to virtually double over the subsequent 24 months. The current decline seems to have evened out and the share price has been showing signs of developing an upward trend since late June.
In addition, Principal Financial has an almost perfect track record of raising its annual dividend. The quarterly dividend has also been growing for the last 10 consecutive quarters, going from $0.38 per share in March of 2016 to $0.53 per share in the upcoming September distribution.
Investors who want to receive the increased dividend payout and believe the current price represents a good entry point should take a position prior to the company’s September 5, 2018 ex-dividend date. All eligible shareholders as of the ex-date will receive the next round of quarterly dividend payments on Sept 28.
Principal Financial Group, Inc. (NASDAQ:PFG)
Based in Des Moines, Iowa and founded in 1879, Principal Financial Group, Inc. provides retirement, asset management and insurance products and services to businesses, individuals, and institutional clients worldwide. The company’s Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. This segment offers products and services for defined contribution, defined benefit, non-qualified executive benefit and employee stock ownership plans. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments. Additionally, the Principal International segment offers pension accumulation and income annuity products, mutual funds, asset management and life insurance accumulation products. The U.S. Insurance Solutions segment provides specialty benefits consisting of group dental and vision insurance, group life insurance and disability insurance. This segment also administers group dental, disability and vision benefits, as well as other individual life insurance products in the United States.
The first five months of the trailing 12-month period saw the share price increase 17% to a peak of $75.04 in late January 2018. Interestingly, this high was also the peak of the uptrend since 2016, in which the share price essentially doubled. After the peak, PFG shares took an initial 20% dive over a two-week period amid the overall market pullback. However, unlike many other stocks that recovered quickly, PFG dropped another 13% before hitting its 52-week low of $52.58 on June 27. Since then, PFG has stabilized and climbed 7% to a closing price of $56.25 on Aug. 28.
Unlike the declining share price in 2018, Principal Financial’s quarterly dividend payouts have continued rising. The latest increase from $0.52 per share to $0.53 represents the 10th consecutive quarterly increase and a 2% hike from the previous level. Over the past 10 consecutive periods, PFG has advanced its total quarterly dividend amount nearly 40%, which is equivalent to an average growth rate of 3.4% per quarter.
The current $0.53 quarterly dividend amount converts to a $2.12 annualized payout. This total annual payout rose over the past 10 consecutive years more than 370%, or an average growth rate of nearly 17%. Except for a dividend cut in 2008, the company has raised its annual dividend every year since introducing dividend payments in 2002.
PFG’s current 3.8% dividend yield is 30% higher than the company’s own 2.9% average yield over the past five years. While some of that increase can be attributed to the recent share price drop, the 34% share price increase over the past five years worked against a growing yield and the total annual dividend amount more than doubled over that period. Therefore, most of the yield increase is supported by the dividend growth, which rose faster than the share price over the past five years.
The share price drop in early 2018 resulted in a total loss of 8.7% over the past 12 months. However, the longer-term performance fared much better — a 20.3% total return over the past three years and a 51% total return over the five-year period.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.