Prudential plc (PRU.L)

Financials · LSE · UK

£10.53+4.67% today

Fundamentals

Market cap£26.02B

P/E ratio9.0

Dividend yield1.89%

Revenue growth (YoY)+18.8%

Profit margin27.6%

Return on equity20.6%

Valuation and ratings

DCF fair value£22.95

Upside to fair value+117.9%

Analyst target (mean)£14.10

Analyst range£12.00 to £16.10

Analysts covering14

Consensus viewstrong buy

Moat score78/100

Overall rating83/100, Strong Buy

Prudential plc trades at £10.53, which is 118% below the £22.95 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 78 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 9.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Prudential plc

Prudential plc, through its subsidiaries, provides life and health insurance, and asset management solutions to individuals in Asia and Africa. It offers savings and investments products; and wealth, health, and protection products. The company was founded in 1848 and is headquartered in Central, Hong Kong.

Industry: Insurance - LifeEmployees: 15,338HQ: Hong Kong

PRU.L passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Quality at a fair price

Good businesses, not cheap ones. A wide moat and a strong rating, at a multiple that has not run away.

Wide moat compounders

Businesses with a structural reason competitors cannot take their profits away. The rarest and most valuable thing in investing.

Deep value, with a pulse

A very low earnings multiple is usually a warning. This screen demands a low multiple AND evidence the business still works.

High return on equity, low debt

A high ROE is easy to fake with borrowing. This screen demands the return without the leverage, which is a much shorter list.

High margin machines

Companies that keep an unusually large share of every pound they sell. That is pricing power made visible.

Common questions

Is Prudential plc (PRU.L) undervalued?

Against our discounted cash flow estimate of £22.95, PRU.L at £10.53 is 118% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is PRU.L's P/E ratio?

PRU.L trades at 9.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

The full research page for PRU.L, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.

Open PRU.L in the app Free guides and screens

Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.