Pfizer Inc. (PFE) vs Principal Financial Group, Inc. (PFG): Which Is the Better Buy in 2026?
As of 2026-06-19, PFE is overvalued at $25, with a DCF intrinsic value of $22 and a margin of safety of -12%. PFG is undervalued at $110, with an intrinsic value of $154 and a margin of safety of 29%. Of the two, PFG has the wider margin of safety.
Rewards
- ★Gross margin of 74.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★FCF yield of 8.6% is historically attractive — the business generates significant cash relative to its price.
- ★Trailing P/E of 19.2x is 37% below the historical average of 30.4x — potentially undervalued relative to its own history.
- ★Free cash flow has grown at a 13.2% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Share count has been reduced by 11% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★FCF yield of 18.8% is historically attractive — the business generates significant cash relative to its price.
Risks
- ⚠ROIC has declined by 15.9 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠PEG ratio of 13.77 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Free cash flow has declined at a 29.6% CAGR over the past 4 years — a concerning trend.
- ⚠Altman Z-Score of 0.15 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Insiders have sold $2.9M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $25?
The market implies +5.2% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +4.5%, reflecting heavy growth investment.
What growth rate is the market pricing in at $110?
The market implies +5.3% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding -11.9%, reflecting heavy growth investment.
Economic Moat Score
Learn more →No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: PFE vs PFG
Is Pfizer Inc. or Principal Financial Group, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, PFG trades at a 28.9% margin of safety (intrinsic value $154 vs. price $110), compared to PFE's -12.3% margin of safety (intrinsic $22 vs. $25).
Which stock has a wider economic moat, Pfizer Inc. or Principal Financial Group, Inc.?▼
PFG scores 49/100 (Narrow moat), while PFE scores 35/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Principal Financial Group, Inc. in financial distress?▼
PFG's Altman Z-Score of 0.1 places it in the Distress zone, signaling elevated bankruptcy risk. PFE scores 2.1 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Pfizer Inc. or Principal Financial Group, Inc.?▼
Principal Financial Group, Inc. (PFG) generates a 18.8% free cash flow yield, compared to Pfizer Inc.'s 8.6%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Pfizer Inc. or Principal Financial Group, Inc.?▼
PFG earns 10.9% ROIC versus PFE's 10.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Pfizer Inc.'s or Principal Financial Group, Inc.'s?▼
PFG's dividend earns a safety score of 84/100 (Very Safe), compared to PFE's 24/100 (Unsafe). PFG has raised its dividend for 3 consecutive years.