Prudential Earnings: Management Holds Firm on Value of Long-Term Investment Over Distributions

Prudential has reported earnings for 2023 that are slightly below our forecasts. We think the broad takeaway from these results is that the business is continuing to focus on investments over shareholder distributions. Adjusted operating profit for the year came in at $2.893 billion and that 8% year-on-year rise is a smidge below our forecast of $2.905 billion. The announcement that Prudential’s board is proposing a $0.1421 per-share dividend, resulting in $0.2047 for the full year, is a tad better than the $0.20000 that we predicted. The IFRS 17 net profit for the year of $1.712 billion means that the business has generated a 9.52% return for shareholders. While below the company’s cost of capital, we think in the background that return is improving. We maintain our fair value estimate and no moat rating.