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Prudential Financial: Analysis Of Dividend Safety And Fair Value Estimate

Published Mon, 11 Feb 2019 08:38:28 -0500 on Seeking Alpha

Investment thesis
Prudential Financial Inc. (NYSE: PRU) yields 3.8% at the current market price of $92, which naturally should attract the attention of income investors. Prudential has been in business for over a century, which adds another plus point for investors to pursue the high dividend yield of Prudential. Despite these facts, Prudential has not attracted much attention from dividend investors, regardless of the recent share price pullback. As the core objective of this analysis is to determine the safety of Prudential's dividends, I ran a number of tests to determine whether dividend investors should be intrigued by the offer. As it turns out, Prudential's dividend is not only safe, but there is also potential for dividend hikes in the future, which should reward long-term investors handsomely.
Share price movement in the last 12 months

(Source - Koyfin)
Brief overview of the company
Prudential Financial is one of the largest, most diversified insurance companies in the U.S., and provides a wide variety of services including life insurance, annuities, retirement related services, and investment management. Its global footprint has allowed the company to grow over the last several years, coupled with the diversified product offering.

(Source - Investor presentation)
The international segment is dominated by business operations in Japan, which accounts for nearly 90% of revenue generated outside the U.S. A core business strategy of the... Read more