Is Principal a Good Investment Company for Your Portfolio

Principal is a well-established investment company with a long history of providing financial services. They offer a range of investment products, including retirement accounts, mutual funds, and insurance products.

Principal has a strong presence in the market, with over $700 billion in assets under management. This scale gives them the resources to invest in a wide range of assets, including stocks, bonds, and real estate.

Their investment products are designed to help individuals achieve their long-term financial goals, such as saving for retirement or funding a child's education.

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Performance-wise, Principal Financial Group, Inc. has a strong track record. As of 10/9/2025, its trailing total returns include dividends or other distributions, which is a good sign for investors.

The benchmark for PFG's performance is the S&P 500 (^GSPC), which is a widely followed index of the US stock market. This comparison helps us understand how PFG's performance stacks up against the broader market.

Here's a comparison of PFG's performance with its peer, State Street Corporation:

This table shows that Principal Financial Group, Inc. has a higher Value Grade than State Street Corporation, which indicates that it may be a more attractive investment option.

Let's take a look at the performance of PFG. Trailing total returns as of 10/9/2025 are available, which may include dividends or other distributions.

The benchmark used to measure PFG's performance is the S&P 500 (^GSPC).

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Valuation Measures are a crucial aspect of stock investing. They help us determine whether a stock is overvalued or undervalued, which is essential for buying low and selling high.

Market capitalization is a key valuation measure, and for the company mentioned in the article, it's a staggering 18.77 billion dollars.

Enterprise Value, another important measure, is slightly higher at 19.06 billion dollars. This gives us an idea of the company's total value, including debt and cash.

The Trailing P/E ratio is a useful indicator of how much investors are willing to pay for each dollar of earnings. For this company, it's a relatively high 16.99.

However, the Forward P/E ratio, which looks at future earnings, is much lower at 9.12. This could indicate that investors expect the company's earnings to grow significantly in the future.

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The PEG Ratio, which is a more advanced valuation measure, is not available for this company.

The Price/Sales ratio, which compares the stock price to the company's revenue, is 1.28. This is a relatively low ratio, suggesting that the company's stock is undervalued compared to its revenue.

The Price/Book ratio, which compares the stock price to the company's book value, is 1.64. This is also a relatively low ratio, indicating that the company's stock is undervalued compared to its book value.

Here are the valuation measures for the company in a concise table:

By analyzing these valuation measures, we can get a better understanding of whether a stock is undervalued or overvalued.

Principal is a well-established investment company with a strong financial foundation. Their balance sheet reveals a total cash of $4.92 billion as of the most recent quarter.

Their debt-to-equity ratio is a notable 35.16%, indicating a significant amount of leverage. This could be a concern for some investors, but it's essential to consider the company's ability to generate cash.

Principal's levered free cash flow is a substantial $1.68 billion, suggesting that they have the capacity to meet their debt obligations. This is a positive sign for investors.

The company's profitability is also worth noting. Their profit margin is a respectable 7.53%, indicating that they are able to maintain a healthy profit margin despite their high debt levels.

Here's a breakdown of Principal's key financial metrics:

Principal's revenue is a substantial $15.13 billion, and their net income available to common is $1.14 billion. This suggests that they are generating significant profits from their investments.

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According to Argus, PRINCIPAL FINANCIAL GROUP has an Investment Rating of HOLD.

The target price for PRINCIPAL FINANCIAL GROUP varies, ranging from $84.000000 to $88.000000.

Argus consistently rates PRINCIPAL FINANCIAL GROUP's Industry Subrating as High.

The Management Subrating, Safety Subrating, Financial Strength Subrating, Growth Subrating, and Value Subrating for PRINCIPAL FINANCIAL GROUP are all consistently rated as Medium.

Here's a summary of the ratings:

Principal Securities offers a range of investment programs designed to meet the needs of its clients.

The Managed Portfolio, created by Morningstar, features discretionary accounts that allocate assets using various mutual funds and exchange-traded funds (ETFs).

This program is a great option for those who want a hands-off approach to investment management.

Principal Securities also offers the Managed Account, which provides investment advice to sponsors of self-directed defined contribution plans.

Additionally, the company offers the Principal Strategy Select Portfolios, a wrap fee asset allocation program that focuses on creating and maintaining portfolios comprised of mutual funds and ETFs.

Here are some of the key services offered by Principal Securities:

Principal Securities offers a range of services to help you manage your investments. Their portfolio and investment management programs are designed to meet the diverse needs of their clients.

They provide a Managed Portfolio, which uses various mutual funds and ETFs to allocate assets. This program is created by Morningstar, a well-respected investment research and analysis company.

The Managed Account service offers investment advice to sponsors of self-directed defined contribution plans. This can be a great option for those who want to take a more active role in managing their investments.

Principal Securities also offers the Advisory Select Portfolios, which are typically non-discretionary accounts administered on a wrap fee basis. This helps clients develop and maintain a strategic investment strategy.

Their Principal Strategy Select Portfolios program focuses on creating and maintaining portfolios comprised of mutual funds and ETFs. This program is designed to help clients achieve their long-term investment goals.

Another option is the Principal Separately Managed Accounts Program, which is a discretionary wrap fee asset allocation program. This program typically features portfolios built using ETFs, stocks, bonds, and other investments.

The Principal Unified Managed Account Select Portfolios program combines elements of the other services offered by Principal Securities. This can be a convenient option for those who want a one-stop solution for their investment needs.

Finally, Principal Securities provides financial planning and consulting services on an "as needed" basis. This can be a great option for those who need personalized advice and guidance to achieve their financial goals.

Here's a summary of the services offered by Principal Securities:

At Principal Securities, investment decisions are guided by a distinct approach for each advisory program. The firm's valuation-driven strategy in the Managed Portfolio program considers markets to be inefficient over the short to medium term.

Markets are believed to exhibit mean reversion over the long term, which can influence capital markets significantly. This concept is a key factor in the firm's investment decisions.

Reward for risk varies and is closely linked to valuation, according to the firm's investment philosophy. This means that investors can expect to earn higher returns for taking on more risk.

Investor sentiment is thought to drive markets to extremes, which can create opportunities for investors. However, this also increases the risk of significant losses.

The firm's investment philosophy also emphasizes the importance of drawdown as a measure of risk. This means that investors should be prepared for potential losses, but also understand that they are a natural part of the investment process.

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Positive skewed risk-reward opportunities can improve risk-adjusted returns, according to the firm's investment approach. This means that investors can potentially earn higher returns while minimizing risk.

The firm's investment philosophy is centered around the idea that markets are complex and can be influenced by various factors. By considering these factors, investors can make more informed decisions and potentially achieve better outcomes.

Here are some key factors that the firm considers when making investment decisions:

Principal Securities primarily works with individual clients, including high-net-worth individuals, but 95% of its clients are individuals without a high net worth.

The firm manages accounts for a wide range of clients, including pension plans, profit-sharing plans, charities, corporations, and government entities.

Individual clients can expect varying minimum account sizes, ranging from $10,000 to $1,000,000, depending on the account type.

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Principal Securities charges an annual fee based on each client's Assets Under Management (AUM), which can range from 1.10% to 1.75% and is charged quarterly, in advance.

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The average annual advisory fee is approximately 0.95% of AUM, according to a 2018 study by RIA in a Box.

Principal Securities is a fee-based financial advisor firm, receiving commissions for the sale of certain insurance and financial products, which creates the potential for a conflict of interest.

However, the firm is bound by fiduciary duty and is legally obligated to act in each client's best interest at all times.

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Fees Under Principal Securities can add up quickly, with annual fees ranging from 1.10% to 1.75% of your AUM.

These fees are charged quarterly, in advance, which means you'll pay the same amount each quarter regardless of market fluctuations.

The average annual advisory fee is around 0.95% of AUM, as shown in a 2018 study by RIA in a Box.

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As you consider working with a financial advisor, keep in mind that Principal Securities is a fee-based firm that receives commissions for selling certain insurance and financial products. This can create a conflict of interest.

Principal Securities has a history of disclosures related to regulatory issues, including inadequate email program monitoring and failure to create a system of oversight to ensure advisors are registered in various states. These disclosures have resulted in fines and censures from regulatory authorities.

The firm is bound by fiduciary duty, which means it is legally obligated to act in each client's best interest at all times. This duty is a crucial consideration when evaluating a financial advisor's potential conflicts of interest.

As of October 10, 2025, State Street Corporation had a market capitalization of $31.5 billion, significantly higher than the Capital Markets median of $3.6 million. This indicates a strong market presence and potential for growth.

State Street Corporation's stock has been performing well, with a 16.3% increase in 2025, although it has seen a 2.3% decline in the previous five trading days. Principal Financial Group, Inc. has a more modest market capitalization of $17.7 billion, putting it in the 86th percentile of all stocks.

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Principal Financial Group, Inc.'s stock has been relatively stable, with a 3.6% increase in 2025, but it has seen a 4.7% decline in the previous five trading days. The company's price-earnings ratio is 16.0, higher than State Street Corporation's 12.4.

Here's a comparison of the two companies' stock performance:

Principal Financial Group, Inc. has a trailing 12-month revenue of $15.1 billion, with a 7.5% net profit margin. This indicates a stable financial performance, although it lags behind State Street Corporation's 21.4% net profit margin.

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AAII's proprietary stock grades offer a concise way to evaluate companies like Principal Financial Group. These grades are based on five key investing factors: value, growth, momentum, earnings estimate revisions, and quality.

Each company receives an A+ Investor grade for each of these factors, ranging from A to F. State Street Corporation and Principal Financial Group both have a B grade in earnings estimate revisions.

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To determine the value of a company, AAII's A+ Investor Value Grade considers six key ratios, including price-to-sales, price-earnings, and price-to-book-value. Principal Financial Group has a Value Score of 82, indicating it's a deep value stock.

Here's a comparison of the value grades for State Street Corporation and Principal Financial Group:

Overall, Principal Financial Group's value grade of A suggests it's a more attractive investment option than State Street Corporation's B grade.

Principal offers a range of Exchange-Traded Funds (ETFs) that cater to different investment needs.

Their US Small Cap ETF has a 5-Year Category Rank of 6, indicating it has performed relatively well in its category over the past five years.

Principal's US Mega-Cap ETF has a 5-Year Category Rank of 8, which suggests it has slightly underperformed its peers in the same time frame.

The Active High Yield ETF from Principal has a 5-Year Category Rank of 7, showing it has held its own in a competitive market.

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Principal's Value ETF has a 5-Year Category Rank of 30, indicating it has struggled to keep up with its peers in the value category.

Here are the 5-Year Category Ranks for Principal's ETFs: