Prudential Earnings: Underwriting Results Remained Steady; Dividend Increased by 4%

No-moat-rated Prudential Financial posted a decent set of numbers in the first quarter as aftertax adjusted operating income came in at $1.14 billion, or $3.12 per share, in the current quarter versus $1.00 billion, or $2.70 per share, in the first quarter of the previous year. The first-quarter results reflect the benefits from a higher interest-rate environment leading to strong investment spreads, while underwriting results remained steady. The adjusted book value per share, which removes the impact of accumulated other comprehensive income, was reported at $97.00 per share in the current quarter, down 0.3% from the $97.30 per share in the first quarter of the previous year. The company's quarterly dividend was increased by 4% to $1.30 per share, which represents approximately 4.7% ($5.20/$110) dividend yield as of the current stock price. We are maintaining our $108 fair value estimate for Prudential Financial after incorporating the first-quarter results.