Principal Financial Group, Inc.

Principal Financial Group, Inc. is an American financial services company that provides retirement savings and income solutions, asset management, and workplace benefits and protection to businesses, individuals, and institutional clients worldwide, administering $1,814.6 billion in assets under administration including $781.0 billion in assets under management as of December 31, 2025. Founded in 1879 in Des Moines, Iowa, the company began as a mutual life insurer and has evolved into a diversified financial conglomerate with approximately 19,700 employees serving more than 75 million customers globally. Its insurance subsidiaries carry A+ ratings from A.M. Best and S&P, A1 from Moody's, and AA- from Fitch, all on stable outlook.

This is a story about a financial-services franchise with genuine scale — the largest 401(k) recordkeeper by participants, the number-one group life insurer by contracts in force, and a top-10 global real estate investment manager — that the market prices at a modest multiple of earnings, in part because GAAP insurance accounting is noisy and in part because the asset management industry faces secular questions about active management. Strip away the mark-to-market volatility of the funds withheld embedded derivative and the exit costs from businesses the company is deliberately shedding, and what remains is a reasonably straightforward set of cash-generating engines: collect fees on retirement assets, earn a spread on a $111 billion general account, underwrite group benefits for small and medium-sized businesses, and return the free cash flow to shareholders.

The file turns on a single question: whether the combined earnings power of the Retirement and Income Solutions, Principal Asset Management, and Benefits and Protection segments — insulated from the noise of exited businesses and derivative marks — can compound at a rate that justifies more than the roughly 15 times trailing earnings the market currently assigns. The bull case does not require transformative growth; it requires the base business to keep compounding. The bear case does not require catastrophe; it requires fees and spreads to erode faster than the buyback can offset.