Head to Head Comparison: Yuanbao (NASDAQ:YB) & Principal Financial Group (NASDAQ:PFG)

Principal Financial Group (NASDAQ:PFG) and Yuanbao (NASDAQ:YB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Risk & Volatility

Principal Financial Group has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Yuanbao has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Principal Financial Group and Yuanbao, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Principal Financial Group	3	6	3	0	2.00
Yuanbao	1	1	0	0	1.50

Principal Financial Group presently has a consensus target price of $108.83, suggesting a potential upside of 1.49%. Yuanbao has a consensus target price of $21.80, suggesting a potential upside of 80.17%. Given Yuanbao’s higher probable upside, analysts clearly believe Yuanbao is more favorable than Principal Financial Group.

Earnings & Valuation

This table compares Principal Financial Group and Yuanbao”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Principal Financial Group	$15.63 billion	1.47	$1.19 billion	$7.04	15.23
Yuanbao	$5.04 billion	0.11	$181.88 million	$4.50	2.69

Principal Financial Group has higher revenue and earnings than Yuanbao. Yuanbao is trading at a lower price-to-earnings ratio than Principal Financial Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

75.1% of Principal Financial Group shares are held by institutional investors. 1.1% of Principal Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Principal Financial Group pays an annual dividend of $3.36 per share and has a dividend yield of 3.1%. Yuanbao pays an annual dividend of $1.24 per share and has a dividend yield of 10.2%. Principal Financial Group pays out 47.7% of its earnings in the form of a dividend. Yuanbao pays out 27.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Principal Financial Group has increased its dividend for 2 consecutive years. Yuanbao is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Principal Financial Group and Yuanbao’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Principal Financial Group	9.93%	16.49%	0.58%
Yuanbao	29.91%	43.75%	29.78%

Summary

Principal Financial Group beats Yuanbao on 11 of the 17 factors compared between the two stocks.

About Principal Financial Group

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.

About Yuanbao

Our mission is to protect health and well-being through technology. We are a leading technology-driven online insurance distributor in China. We take pride in pioneering the seamless integration of insurance with cutting-edge technologies, and have constructed a highly efficient full consumer service cycle engine. Through this engine, we successfully distribute suitable and high-quality insurance products to over ten million insurance consumers. According to Frost & Sullivan, we were the largest independent insurance distributor in China’s personal life and accident & health (A&H) insurance market in terms of first year premiums in 2023. Our engine enables us to provide customized services for each insurance consumer across personalized recommendation, purchasing, policy management, claim settlements and post-sales services. Built upon a scalable architecture, our engine is equipped with effective predictive capabilities generated from interconnected networks of models. This allows us to continually optimize model outcomes across different media channels, diverse consumer preferences and product depth and breadth. As of December 31, 2024, we had approximately 4,700 models supporting our operations. Our engine offers significant value propositions for insurance consumers and insurance carriers. We act as a unique and efficient gateway to distribute customized insurance products underwritten by our partnered insurance carriers. We have robust collaboration with insurance carriers by empowering them to tailor a variety of flagship insurance products, which in turn enables us to attract and retain a vast consumer base and stimulate their demand for insurance products. By accumulating and analyzing more big data, we gain deeper and wider understanding of consumer demands and behavior. Through all this, we are able to fulfill consumers’ evolving needs and enhance insurance carriers’ sales at the same time. We believe there is substantial untapped market potential for online insurance distribution. According to Frost & Sullivan, the penetration rate of online insurance sales still lags behind the penetration rate of online retail sales. Moreover, the penetration rate of online distribution for personal life and A&H insurance in China, in terms of gross written premium (“GWP”), is anticipated to double over the next five years. Driven by our engine and our market leading position, we are well-positioned to further penetrate this rapidly growing market. Our principal executive offices are located in Beijing, the People’s Republic of China.