Principal Financial Group (PFG) is positioned as an appealing investment choice for those prioritizing dividend growth. This financial services giant manages an impressive $1.8 trillion in assets, operating largely behind the scenes. The company's strategic focus is on delivering an annual non-GAAP earnings per share growth ranging from 9% to 12%. This ambitious target is supported by robust performance in the third quarter of 2025 and a consistent approach to capital allocation, highlighted by a remarkable 16-year history of increasing dividends.
Currently, PFG shares are valued at a forward price-to-earnings ratio of 9.3, which is notably below its ten-year historical average. This valuation, combined with a 3.7% dividend yield, suggests a compelling entry point for investors. If the company successfully meets its growth projections, PFG could potentially offer a total return of 28% by 2026. This projection underscores the dual benefit of a steady income stream from dividends and the prospect of significant capital appreciation, making it an attractive option for investors focused on long-term dividend strategies.
While market fluctuations and potential reputational issues pose inherent risks, Principal Financial Group's balanced strategy is designed to offer both immediate income and substantial long-term capital gains for its dividend-oriented shareholders. The firm's consistent financial discipline and strong track record provide a solid foundation for navigating market challenges and achieving its growth objectives. Investors seeking a blend of stability and growth in their portfolio might find PFG to be a valuable addition, contributing to a diversified and resilient investment strategy.
