Increased dividend to $0.50 from $0.45 for shareholders of record on November 13.

When Principal Financial Group (PFG) appeared in this space in October 2008, it had cut its annual dividend in half as the equity markets imploded. But last Monday, the company, a top administrator of employer-sponsored retirement plans, enriched its payout 11%, to 50 cents a share from 45 cents. Disbursement is scheduled for Dec. 4 to investors of record Nov. 13. The stock goes ex-dividend Nov. 10. The new payout, however, is still below the record 90 cents a share Principal paid in 2007. Dividends were initiated in October 2002 at the annual rate of 25 cents a share and sweetened every year prior to the aforementioned cut. Principal , by the way, chose not to participate in Uncle Sam's Troubled Asset Relief Program, or TARP, under which it had been approved to receive $2 billion. Rather, in May, it raised $1.9 billion via a stock sale and an offering of long-term debt.

Neutral - Price 26.03 on Sept. 25
by Sterne Agee

We are downgrading PFG to Neutral, from Buy, on valuation -- as we view the risk/reward from current levels to be largely balanced. Our 33 price target remains intact, based on 12 times our 2010 EPS estimate of $2.75. We expect credit improvement since June 30 has pushed BVPS [book value of equity per share] to a range of $20 to $21, and we continue to believe PFG's capital levels remain adequate relative to potential stress scenario/cumulative investment losses. However, we are concerned that an expansion of valuation for PFG will likely require a return to sustained positive net flows in the company's flagship 401(k) business, which we expect, based on macro conditions, is likely to take some time to develop. In addition, while capital levels are strong following recent equity and debt raises, we do expect above-industry-average investment losses, given PFG's heavy weighting [in] commercial-real-estate-related asset classes. Market cap: $8.3 billion.

But these companies look to me like Hartford (HIG) at $12 or Principal Financial (PFG) at $10 or Genworth (GENW) at $4. The capital markets were open and receptive to those three annuity/insurers, and I don't even think they are as good as the banks I listed because they don't benefit from the yield curve, which is bountiful and apparently will stay bountiful for now. And yes, these can grow their way out of their holes.

Principal's shares have rallied smartly this month, but they still trade at just a conservative book-value estimate near 14. Within a year, they could reach 22.

In the Thursday "Sell Block" segment, Cramer recited the mantra "when facts change, we change our minds," as he released life insurers Principal Financial (PFG), Prudential (PRU), Lincoln National (LNC) and Hartford Group (HIG) from solitary confinement.

BankingMyWay

Cramer said he doesn't want to own any of these names, but with the news that the government's TARP plan will be extended to the insurers, they're no longer toxic.

Cramer said there's no doubt these companies made a lot of terrible decisions, but TARP solves many of their problems and it's time to stop hating them. ("Mad Money Recap," 4-9-09)

Lincoln National (LNC), Prudential (PRU), MetLife (MET), Hartford (HIG) and Principal Financial Group (PFG) are right back on the red-hot griddle, and as a bull on the way down, this group is the only group that can truly shake my convictions. Given the exposure these firms have to bedrock principles, payoffs in annuities and life insurance, it is vital that some branch of the Treasury come on and say, "Look, your contractual obligations will be made good, regardless of the ramifications of the companies themselves." These deals have to be like pension benefit guarantees, but the government doesn't seem to be aware of it.

Mad About Options: Gilead Sciences: The Mad About Options crew reviews Jim Cramer's recent bearish comments about Gilead Sciences and offers options strategies for traders and investors. Also hear opinions about Principal Financial and United Parcel Service.
Click here to watch the video.

From a recent Mad Money show:"This stock is moving up. But if all the negatives are still true, then we don't want to own it. I want to hear from the Goldman Sachs analyst who scared us all to death first. "

And while we are at it, you, Prudential (PRU), and you, MetLife (MET), and you, Hartford (HIG), and you, Principal (PFG), are one firm.

DIFFICULT FOR INS.COMPANIES

jh

Never saw any meaningful gain in stock value.