Principal Financial Group Stock Upgraded (PFG)

NEW YORK (TheStreet) -- Principal Financial Group (NYSE:PFG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

• PFG's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
• PRINCIPAL FINANCIAL GRP INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PRINCIPAL FINANCIAL GRP INC increased its bottom line by earning $2.07 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.81 versus $2.07).
• PFG, with its decline in revenue, underperformed when compared the industry average of 20.8%. Since the same quarter one year prior, revenues slightly dropped by 8.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Insurance industry and the overall market, PRINCIPAL FINANCIAL GRP INC's return on equity is below that of both the industry average and the S&P 500.

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company has a P/E ratio of 11.1, above the average financial services industry P/E ratio of 10.1 and below the S&P 500 P/E ratio of 17.7. Principal Financial Group has a market cap of $7.7 billion and is part of the financial sector and financial services industry. Shares are down 21.7% year to date as of the close of trading on Friday.

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