Principal Financial Group, Inc.

What they do

Principal Financial Group provides retirement and income solutions (defined contribution plans, defined benefit plans, pension risk transfer, investment-only products, annuities, bank products, trust and custody services), global asset management (equity, fixed income, real estate, alternatives, fund offerings, international pension accumulation), and specialty benefits and insurance for business owners and employees. The company operates through three reportable segments: Retirement and Income Solutions, Principal Asset Management, and Benefits and Protection, plus a Corporate segment.

Revenue drivers

• Retirement and Income Solutions — Largest segment; generates revenue from retirement plan administration and investment products, including 401(k)/403(b) plans, defined benefit plans, pension risk transfer, GICs, and individual annuities. RIS transfer deposits were $9 billion in 2Q26, up 30%.
• Principal Asset Management — Generates asset-based fees from institutional, retirement, high net worth, and retail investors. Investment Management gross sales were $30 billion in 2Q26, up 2%; International Pension AUM reached $169 billion, up 18%.
• Benefits and Protection — Provides specialty benefits and insurance (e.g., accident and health, life, disability) to small and medium-sized businesses and their employees. This segment benefits from the underserved SMB market.

Recent performance

For 2Q26, net income attributable to PFG was $403.4 million ($1.84 per diluted share), down 1% from $406.2 million in 2Q25. Non-GAAP operating earnings rose 12% to $547.0 million ($2.50 per diluted share); excluding significant variances, operating earnings increased 13% to $528.7 million ($2.42 per share). Assets under administration reached $1,892.4 billion, up 9% year-over-year, and AUM $808.0 billion, up 7%. AUM net cash flow was negative $11.1 billion in 2Q26 and negative $14.4 billion on a trailing twelve-month basis.

Strategy

Management emphasizes strengthening leadership in retirement, advancing position in the small and midsized business market, and leveraging global asset management scale. The company is executing against strategic priorities to drive earnings growth, ROE expansion, and disciplined capital return. In 2Q26, it returned $427 million to shareholders, including $250 million of share repurchases and $177 million of dividends. The company announced a dividend increase to $0.84 per share for 3Q26, an 8% increase over 3Q25.

Risks

• Market and interest rate risk — Fixed income and equity market movements, along with interest rate changes, can adversely affect investment income, hedging costs, and product margins across retirement and asset management businesses.
• Negative net cash flow in asset management — AUM net cash flow was negative $11.1 billion in 2Q26 and negative $14.4 billion on a trailing twelve-month basis, which could pressure future fee revenue if outflows persist.
• Regulatory and litigation risk — As a financial services and insurance provider, PFG faces regulatory scrutiny, class action lawsuits, and changes in tax or pension laws that could impact product demand and costs.
• Pension risk transfer and annuity concentration — Growth in pension risk transfer and annuity sales exposes PFG to longevity, mortality, and credit risk, and requires significant capital and reinsurance management.

Outlook

Management expresses confidence in continued momentum, citing strong earnings growth, ROE expansion, and disciplined capital return. They raised the third quarter 2026 dividend, signaling expected cash flow stability. The company expects to continue leveraging its scale in global asset management and its leadership in retirement to grow in the small and midsized business market.