Principal Financial Group Inc (PFG): Is This Retirement Service Stock a Buy After Its Recent Growth?

Lincoln National with consistent share buybacks

Lincoln National Corporation (NYSE:LNC) is also cheaper than Principal Financial Group Inc (NYSE:PFG). It is trading at $35.50 per share, with the total market cap of $9.5 billion. The market values Lincoln National at only 7.1 times its forward earnings and only 0.64 times its book value. In the first quarter 2013, Lincoln National Corporation (NYSE:LNC) generated around $239 million in net income, a bit lower than the net income of $243 million in the first quarter last year. However, its earnings per share came in at $0.86, 4.8% higher than the earnings per share of $0.82 in the first quarter of 2012. The growth in earnings per share was attributable mainly to the reduction in the number of total shares outstanding. The share count has declined from 296 million last year to only 279 million this year. In the investor meeting, the company said that an additional $150 million worth of shares had been repurchased. The company expected that it would spend total $400 million to buy back its shares in 2013.

My Foolish take

Principal Financial Group Inc (NYSE:PFG) could experience some upside in 2013 due to its potential growth in its earnings per share. With the relatively high valuation compared to its peers, however, I would not consider it was the stock for me. Among the three, I like Lincoln National the most, with the lowest valuation and a potential share buybacks that could push up the earnings per share and the share price within 2013.

The article Is This Retirement Service Stock a Buy After Its Recent Growth? originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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