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5 Reasons to Add Ameriprise (AMP) Stock to Your Portfolio Now
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Ameriprise Financial, Inc.’s (AMP - Free Report) diversified investment portfolio and solid restructuring initiatives are expected to keep aiding growth. Also, its solid assets under management (AUM) balance will likely continue to support the top line. Thus, it seems to be a wise idea to add the stock to your portfolio now.
The company has also been witnessing upward earnings estimate revisions of late, reflecting that analysts are optimistic regarding its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for its current-year earnings has been revised upward by 5.2%. Thus, AMP currently carries a Zacks Rank #2 (Buy).
Looking at the company’s price performance, its shares have gained 41.3% over the past year against the industry’s decline of 6.4%.
Image Source: Zacks Investment Research
Below we have mentioned some other factors that make Ameriprise an attractive investment option now.
Earnings per Share (EPS) Growth: Over the last three to five years, the company witnessed EPS growth of 14.7%, higher than the industry’s average of 9.9%. The upward trend is expected to continue in the near term, as indicated by its projected EPS growth rate of 14% for 2022 and 14.4% for 2023.
Further, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 7.6%.
Revenue Strength: Ameriprise constantly modifies its product and service offering capacity to keep pace with dynamic market needs. The strategy, along with growth in AUM, has helped it register top-line growth. Total net revenues (GAAP basis) witnessed a CAGR of 0.2% over the five years between 2016 and 2020. The upward trend continued in all the four quarters of 2021.
The company’s efforts to launch products are likely to keep supporting top-line growth in the quarters ahead. Its estimated sales growth rates of 11% for 2022 and 8.6% for 2023 ensure the continuation of the upward trend in revenues.
Steady Capital Deployments: Ameriprise manages its capital levels efficiently. In April 2021, the company announced a dividend hike for the 14th time since 2010. Moreover, its board of directors has authorized an additional repurchase plan worth $3 billion (expiring on Mar 31, 2024). As of Jan 25, 2022, the company had $352 million shares left to be repurchased under its August 2020 authorization (available through Sep 30, 2022).
Given a strong balance sheet and liquidity position, Ameriprise is expected to be able to sustain efficient capital deployment activities in the future, thus enhancing shareholder value.
Superior Return on Equity (ROE): The company’s ROE of 48.36% compares favorably with the industry’s ROE of 17.08%. This reflects its efficiency in utilizing shareholders’ funds.
Favorable Valuation: Ameriprise stock seems undervalued right now compared with the broader industry. Its current price-sales ratio is lower than the respective industry average.
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.
The Zacks Consensus Estimate for Morgan Stanley’s current-year earnings has been revised 4.2% upward over the past 60 days. MS’s shares have risen 37.1% in the past year.
Fifth Third Bancorp recorded an upward earnings estimate revision of 2.7% for 2022 over the past 60 days. The FITB stock has rallied 47.3% in the past year.
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5 Reasons to Add Ameriprise (AMP) Stock to Your Portfolio Now
Ameriprise Financial, Inc.’s (AMP - Free Report) diversified investment portfolio and solid restructuring initiatives are expected to keep aiding growth. Also, its solid assets under management (AUM) balance will likely continue to support the top line. Thus, it seems to be a wise idea to add the stock to your portfolio now.
The company has also been witnessing upward earnings estimate revisions of late, reflecting that analysts are optimistic regarding its earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for its current-year earnings has been revised upward by 5.2%. Thus, AMP currently carries a Zacks Rank #2 (Buy).
Looking at the company’s price performance, its shares have gained 41.3% over the past year against the industry’s decline of 6.4%.
Image Source: Zacks Investment Research
Below we have mentioned some other factors that make Ameriprise an attractive investment option now.
Earnings per Share (EPS) Growth: Over the last three to five years, the company witnessed EPS growth of 14.7%, higher than the industry’s average of 9.9%. The upward trend is expected to continue in the near term, as indicated by its projected EPS growth rate of 14% for 2022 and 14.4% for 2023.
Further, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 7.6%.
Revenue Strength: Ameriprise constantly modifies its product and service offering capacity to keep pace with dynamic market needs. The strategy, along with growth in AUM, has helped it register top-line growth. Total net revenues (GAAP basis) witnessed a CAGR of 0.2% over the five years between 2016 and 2020. The upward trend continued in all the four quarters of 2021.
The company’s efforts to launch products are likely to keep supporting top-line growth in the quarters ahead. Its estimated sales growth rates of 11% for 2022 and 8.6% for 2023 ensure the continuation of the upward trend in revenues.
Steady Capital Deployments: Ameriprise manages its capital levels efficiently. In April 2021, the company announced a dividend hike for the 14th time since 2010. Moreover, its board of directors has authorized an additional repurchase plan worth $3 billion (expiring on Mar 31, 2024). As of Jan 25, 2022, the company had $352 million shares left to be repurchased under its August 2020 authorization (available through Sep 30, 2022).
Given a strong balance sheet and liquidity position, Ameriprise is expected to be able to sustain efficient capital deployment activities in the future, thus enhancing shareholder value.
Superior Return on Equity (ROE): The company’s ROE of 48.36% compares favorably with the industry’s ROE of 17.08%. This reflects its efficiency in utilizing shareholders’ funds.
Favorable Valuation: Ameriprise stock seems undervalued right now compared with the broader industry. Its current price-sales ratio is lower than the respective industry average.
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
A couple of other top-ranked stocks from the finance space are Morgan Stanley (MS - Free Report) and Fifth Third Bancorp (FITB - Free Report) . Both Morgan Stanley and Fifth Third Bancorp currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Morgan Stanley’s current-year earnings has been revised 4.2% upward over the past 60 days. MS’s shares have risen 37.1% in the past year.
Fifth Third Bancorp recorded an upward earnings estimate revision of 2.7% for 2022 over the past 60 days. The FITB stock has rallied 47.3% in the past year.