Supported by a diversified investment portfolio, along with solid restructuring/streamlining initiatives, Ameriprise Financial, Inc. AMP remains well positioned for top-line growth. Hence, it seems to be a wise idea to add the stock to your portfolio now.
Moreover, the company has been witnessing upward estimate revisions, of late, reflecting that analysts are optimistic regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 1.3%. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Looking at the company’s price performance, the stock has gained 11.8% over the past six months as against the industry’s decline of 2.9%.
Here are some other factors that make Ameriprise an attractive investment option now.
Earnings per Share (EPS) Growth: Over the past three to five years, Ameriprise has witnessed EPS growth of 14.5%, higher than the industry’s average of 2.3%. This upward trend is expected to continue in the near term as indicated by its projected EPS growth rate of 6.4% for 2019 and 11.6% for 2020.
Further, the company has an impressive earnings surprise history. It has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 3.3%.
Revenue Strength: Ameriprise constantly modifies its product and service-offering capacity to keep pace with dynamic market needs. This strategy, along with growth in assets under management (AUM), has helped the company register top-line growth. Total net revenues (GAAP basis) have witnessed a CAGR of 1.1%, over the last five years (2014-2018).
While the company’s revenues are projected to decline 4.1% in 2019, its estimated sales growth rate of 4.4% for 2020 ensures the continuation of upward trend in revenues.
Steady Capital Deployments: Ameriprise manages its capital levels efficiently. This April, the company announced a dividend hike for the 12th time since 2010. Also, it has a share-repurchase plan in place. In February, it announced additional share repurchases of $2.5 billion. Given a strong balance sheet position and decent earnings growth, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
Superior Return on Equity (ROE): The company’s ROE of 37.97% compares favorably with the industry’s ROE of 13.40%. This reflects its efficiency in utilizing shareholders’ funds.
Stock seems Undervalued: Ameriprise seems undervalued right now compared with the broader industry. Its current price-earnings (F1) and price-sales ratios are lower than the respective industry averages.
Moreover, the stock has a Value Score of B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks to Consider
Some other top-ranked stocks from the finance space are Cohen & Steers, Inc. CNS, BlackRock, Inc. BLK and Franklin Resources, Inc. BEN. All these stocks currently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, Cohen & Steers witnessed an upward earnings estimate revision of 6.9% for 2019. Its shares have surged 49.4% so far this year.
Over the past 60 days, the Zacks Consensus Estimate for BlackRock’s current-year earnings has been revised 5.2% upward. Its shares have gained 10.9% so far this year.
Franklin Resources has witnessed an upward earnings estimate revision of 8.9% for fiscal 2019, over the past 60 days. The company’s shares have improved 12.2%, year to date.
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