Recent buy – PRU

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Prudential_Financial.svgWith the recent market fall off, I couldn’t
help myself scooping up companies at the 52-week low. One of the, is Prudential.

Prudential Financial, Inc. provides insurance, investment management, and other financial products and services to individual and institutional customers in the United States and internationally.

The company principally offers

  • life insurance,
  • annuities,
  • retirement-related services,
  • mutual funds,
  • investment management products.

Its U.S. Retirement Solutions and Investment Management division offers

  • individual variable and fixed annuity products;
  •  recordkeeping,
  • plan administration,
  • actuarial advisory,
  • tailored participant education and communication,
  • trustee, and institutional and retail investments services;
  •  and guaranteed investment contracts, funding agreements, institutional and retail notes,
  •  structured settlement annuities,
  • other group annuities.

TheStreet Ratings on January 21, 2016 as a “buy”.
Report Summary: TheStreet Ratings team rates Prudential Financial Inc as a Buy with a ratings score of B.

Report Snippet: We rate PRUDENTIAL FINANCIAL INC (PRU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

How Safe is PRU dividend?

After taking a hit in 2008-2009. The company has consistently raising dividend and payout at 37.6%, so dividend still have room to grow.

ype Amount ($) Dividend
Yield
(Annualized)
1-Year
Growth
5-Year
Growth
Payout Ratio
(TTM)
Annualized Dividend (MRD) 2.80 4.09% 20.69% 19.48% 35.62%
Annualized Dividend (TTM) 2.44 3.56%
1-Year Holding Period (TTM, including all Non-Regular Payments) 2.44 3.56%

Earning estimates is consistently meeting or exceeding analyst’s estimates: 

EPS Market Comparison

Compustat I/B/E/S
P/E Ratio EPS Growth
TTM 5-Yr Historical
Avg
PEG Ratio
(5-Year Proj)
Last Qtr vs. Same
Qtr Prior Yr
TTM vs.
Prior TTM
Current Year vs.
Previous Year
PRU Prudential Financial Inc 8.7 17.2 1.2 +219.19 % +62.06 % +12.61 %
Industry: Insurance 10.6 16.4 3.9 +4.37 % -1.34 % +1.85 %
Sector: Financials 12.3 26.7 4.5 +40.63 % +38.44 % +12.57 %
Market: S&P 500® Index -15.48 %

Rating: 3.67 out of 5, ‘B’ Buy.

P/E at 8. Dividend yield at 4%.

10 shares of PRU @$73.55 with this buy it will add $28 to my annual dividend. 

My annual dividend is now sitting at $44xx.xx which is average $370/month. I‘m $170/month short on my goal of achieving $500/mo. I was going to add more shares as soon as I have more free funds, but the stocks has moved up on the last several sessions.

My insurance has just increased in price again for no good reason. These companies are only focus on their bottom lines. They rely on people who are lazy to shop around. Which in turn they make tons of money.

What I like about Prudential is their diversity business and the ability to weather the storm. This close to 200 years old company will be there regardless how bad the economy is going to be there just like GE, AT&T, P&G or DIS. 

Full Disclosure: I’m long GE, AT&T, PG, and DIS

GA

4 Comments

  1. Ciao WRI,
    Right now I am into Legal and General and Old Mutual, but Prudential was on my radar back then when I started moving into the insurance business investments. It’s a very solid company, shame that when I wanted to go in was too expensive… 🙁 Great buy I’d say!

    • Thanks for commenting. Insurance and lawyers always win. I hear you on buying insurance. I’ve been eyeing traveler, but it’s still expensive, the yield isn’t as high.

      They will get you in the front end, then if you file a claim, they’ll get you on the back end.

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