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Analyst Blog

On March 24, 2014, we issued an updated research report on Ameriprise Financial, Inc. (AMP - Analyst Report). The company reported better-than-expected fourth-quarter 2013 results on Feb 4. A rise in both assets under management (AUM) and assets under administration continued to drive the company’s top-line growth.

Adjusted earnings not only surpassed the Zacks Consensus Estimate but also increased on a year-over-year basis.

Ameriprise remains an attractive asset for yield-seeking investors due to its strong capital deployment activities. In April 2013, the company raised its quarterly cash dividend by 15.6%. This was the sixth dividend hike for the company since 2010.

A well-diversified portfolio and strong balance sheet position remain strengths for Ameriprise. Moreover, we believe that the company will continue to restructure its business operations by focusing on core business in order to remain profitable.

The Zacks Consensus Estimate for 2014 advanced slightly to $8.06 per share over the last 60 days. Moreover, for 2015, the Zacks Consensus Estimate rose marginally to $9.05 per share over the same time period.

However, Ameriprise’s mounting operating expenses is a concern. Going forward, increasing advertising costs will keep expenses high. Further, stiff competition and continued outflows from the company’s Asset Management segment will weigh on top-line growth.

Ameriprise now has a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Some better-ranked investment managers include Fortress Investment Group LLC (FIG - Snapshot Report), Lazard Ltd. (LAZ - Analyst Report) and Calamos Asset Management Inc. (CLMS - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

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