Prudential Financial Inc Stock Hold Recommendation Reiterated (PRU)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Prudential Financial (NYSE: PRU) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

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Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $5,713.00 million or 1.16% when compared to the same quarter last year. Despite an increase in cash flow, PRUDENTIAL FINANCIAL INC's average is still marginally south of the industry average growth rate of 10.86%.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, PRUDENTIAL FINANCIAL INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for PRUDENTIAL FINANCIAL INC is currently extremely low, coming in at 13.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.70% is significantly below that of the industry average.

Prudential Financial, Inc., through its subsidiaries, provides various financial products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management services in the United States, Asia, Europe, and Latin America. Prudential Financial has a market cap of $24.02 billion and is part of the financial sector and insurance industry. The company has a P/E ratio of 20.6, above the S&P 500 P/E ratio of 17.7. Shares are up 3.8% year to date as of the close of trading on Tuesday.

You can view the full Prudential Financial Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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