Prudential plc (PRU): Is Now the Time to Buy It?

Nonetheless, I still believe that the company looks undervalued in comparison to its peers in the sector.

You see, unlike the majority of its peers in the life insurance sector, which have almost no international diversification, Prudential plc (LON:PRU) generates 50% of its income from Asia, where the life insurance market is growing quickly — in line with rapidly rising incomes. Indeed, during 2012, the company’s income from its Asian operations grew by 26%, to £988 million.

In addition, Prudential plc (LON:PRU) has recently made a strategic switch, to start offering products that boast a shorter lead time to producing a profit. This means that the company has been able to drastically improve its profitability and cash generation, which could pave the way for further shareholder returns or dividend growth.

So, overall, based on Prudential plc (LON:PRU)’s current discount to sector peers, solid cash generation, and potential for increasing shareholder returns, I believe now looks to be a good time to buy Prudential at 1,097p.

In the meantime, please stay tuned for my next verdict on a FTSE 100 share.

The article Is Now the Time to Buy Prudential? originally appeared on Fool.com and is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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