It seems to be a wise idea to add Ameriprise Financial, Inc. (AMP - Free Report) stock to your portfolio now as the company’s diversified investment portfolio and solid restructuring initiatives are expected to aid growth. Also, its solid assets under management (AUM) balance will likely continue to support the top line.
The company has 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 1.1%. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Looking at the company’s price performance, its shares have gained 24.8% over the past six months, outperforming the industry’s growth of 16.7%.
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, the company witnessed EPS growth of 16.1%, higher than the industry’s average of 6.3%. The upward trend is expected to continue in the near term as indicated by its projected EPS growth rate of 13.5% for 2020 and 11.1% for 2021.
Further, the company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 2.8%.
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 helped it register top-line growth. Total net revenues (GAAP basis) witnessed a CAGR of 3.2% over the last four years (2016-2019).
Its estimated sales growth rates of 0.5% for 2020 and 4.3% for 2021 ensure the continuation of upward trend in revenues.
Steady Capital Deployments: Ameriprise manages its capital levels efficiently. In April 2019, the company announced a dividend hike for the 12th time since 2010. Also, it has a share-repurchase plan in place. In February 2019, 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 37.39% compares favorably with the industry’s ROE of 13.96%. 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 A. 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 few other top-ranked stocks from the same space are mentioned below.
Cohen & Steers Inc.’s (CNS - Free Report) Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6% over the past 60 days. Moreover, the stock has rallied 6% in the past three months. It currently sports a Zacks Rank #1.
Legg Mason, Inc. (LM - Free Report) has witnessed upward earnings estimate revision of 2.7% for the current fiscal year over the past 60 days. The company’s shares have gained 26.8% in the past three months. At present, the stock flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for earnings of Artisan Partners Asset Management Inc. (APAM - Free Report) has been revised 6.7% upward for the current year over the past 60 days. The stock has gained 2.2% over the past three months. It currently carries a Zacks Rank #2.
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