Principal Financial Raises Dividend 1.2% to $0.85

Principal Financial Group raised its quarterly common dividend 1.2% to $0.85 per share from $0.84. The shares will trade ex-dividend on December 2, 2026, and the payment is due December 18, 2026. The stated annual dividend is $3.36 per share.

Why the dividend changed

Principal announced the increase with its third-quarter results, presenting the decision alongside higher underlying earnings, continued capital returns and a strong capital position. Non-GAAP operating earnings per diluted share excluding significant variances rose 7% from the prior-year quarter, while excess and available capital stood at $1.5 billion. The company returned $429 million to shareholders during the quarter, including $250 million through share repurchases. Principal's third-quarter release placed the dividend increase within that broader capital-allocation program.

The operating picture was mixed but supportive at the enterprise level. Retirement and Income Solutions benefited from higher net revenue and disciplined expenses. Benefits and Protection recorded improved life-insurance mortality experience. Principal Asset Management faced weaker investment-management revenue and outflows from selected active-equity strategies, partly offset by inflows into active exchange-traded funds and private markets. These trends are detailed in the company's third-quarter earnings presentation.

Principal began 2026 targeting earnings-per-share growth of 9% to 12%, free-capital-flow conversion of 75% to 85%, and capital deployments of $1.5 billion to $1.8 billion. The increase is consistent with that capital-return framework, although the company did not identify a single operating development as its cause. Principal's 2026 outlook also emphasized returning excess capital to shareholders.

No stock split, merger or spinoff explains the change. Principal completed its acquisition of Beam Benefits on September 1, 2026, adding digital benefits capabilities and small-business customers. The company said its capital-deployment and earnings-growth targets were unchanged after the transaction. Beam made a modest contribution to Specialty Benefits revenue during the third quarter, while integration costs weighed on results. The acquisition release confirms the transaction's strategic role.

Dividend track record

The latest increase extends Principal's dividend-growth streak to 13 consecutive years. No annual cut appears in the payment record supplied for this analysis. The five-year dividend-growth rate is 6.6% annual growth, indicating that the current increase is smaller than the company's recent longer-term pace.

Recent payments show a pattern of frequent, measured increases. The quarterly payment rose from $0.73 with the December 2, 2024, ex-dividend date to $0.75 in March 2025, $0.76 in June, $0.78 in September and $0.79 in December. It then advanced to $0.80 in March 2026, $0.82 in June and $0.84 in September before the new $0.85 rate.

Full-year totals reinforce that pattern. Annual payments increased from $2.24 in 2020 to $2.44 in 2021, $2.56 in 2022, $2.60 in 2023, $2.85 in 2024 and $3.08 in 2025. Growth slowed to 1.6% in 2023 before accelerating to 9.6% in 2024 and 8.1% in 2025. The record reflects gradual compounding rather than a dividend reset following a corporate transaction.

Is the dividend covered?

The dividend consumes 45% of earnings. That ratio indicates earnings exceed the amount distributed and leave room within reported profit for other uses of capital, including business investment and share repurchases.

SmarterDividends rates the dividend A, with a safety score of 88. That falls within the very safe range of 80-100. The grade reflects strong current coverage and the established growth record, but it is a risk assessment rather than a guarantee of future payments.

Yield and valuation

At a share price of $111.98, Principal carries a 3.05% forward yield. That is below the Financial Services sector median forward yield of 5.84%, so the shares provide less current dividend income than the sector midpoint. The stock's one-year price return is a 28.0% gain, which has also raised the price paid for each dollar of dividend income.

SmarterDividends estimates fair value at $116.59 and assigns a fair valuation verdict, with 7% upside to fair value. At the stated annual dividend, 100 shares produce $336.00 in annual income before taxes.

What to watch

The immediate date is December 2, 2026, when the shares are scheduled to trade ex-dividend. Payment is set for December 18, 2026. Investors must own shares before the ex-dividend date to qualify under standard market settlement rules.

The next operating checkpoints are Principal's fourth-quarter results and its updated capital-deployment outlook. Relevant items include the level of excess capital, earnings coverage, cash generation and the balance between dividends and repurchases. Asset-management flows also warrant attention after the third-quarter outflows from selected active-equity strategies.

Beam Benefits integration is another concrete item. Principal has said the acquisition did not alter its 2026 targets, while the third-quarter presentation identified both a modest revenue contribution and integration costs. Subsequent results will provide the next reported evidence on those effects and on progress in the small-business benefits strategy.