Prudential Financial: Buying Opportunity In A Dividend Growth Stock

Prudential Financial, Inc. (NYSE:PRU) stock is an excellent combination of value and dividend growth stock. Prudential is benefiting from growth of fees, especially in its Annuities and Asset Management businesses. Although PRU's stock has significantly outperformed the market since the beginning of 2013, with a gain of 66%, in my opinion, it still has plenty of room to move up. Prudential has compelling valuation metrics and strong earnings growth prospects; its EV/EBITDA ratio is the sixth lowest among all S&P 500 stocks. In addition, the company continued to deliver large sums of cash back to shareholders by stock buyback and growing dividend payments.

Prudential Financial, the second largest U.S. life insurer, will continue to benefit from growth of fees, especially in its Annuities and Asset Management businesses. Prudential has compelling valuation metrics and strong earnings growth prospects; its PEG ratio is very low at 0.95, and the EV/EBITDA ratio is extremely low at 5.88, the sixth lowest among all S&P 500 stocks. Moreover, PRU's stock is trading below book value; its price-to-book-value ratio is at 0.98. In addition, Prudential returns value to its shareholders by stock buyback and increasing dividend payments. All these factors bring me to the conclusion that PRU stock is a smart long-term investment. Furthermore, the rich growing dividend represents a gratifying income.

Source: Seeking Alpha

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