Ameriprise Financial has been treading water for the past six months, recording a small loss of 3.5% while holding steady at $518.26. The stock also fell short of the S&P 500’s 8.8% gain during that period.
Is now the time to buy AMP? Find out in our full research report, it’s free.
Why Do Investors Watch AMP Stock?
Founded in 1894 and spun off from American Express in 2005, Ameriprise Financial (NYSE: AMP) provides financial planning, wealth management, asset management, and insurance products to help individuals and institutions achieve their financial goals.
Three Positive Attributes:
1. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Ameriprise Financial’s EPS grew at a remarkable 17.6% compounded annual growth rate over the last five years, higher than its 8.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
2. Growing TBVPS Reflects Strong Asset Base
We consider tangible book value per share (TBVPS) an important metric for financial firms. TBVPS represents the real, liquid net worth per share of a company, excluding intangible assets that have debatable value upon liquidation.
Although Ameriprise Financial’s TBVPS increased by a meager 3.6% annually over the last five years, the good news is that its growth has recently accelerated as TBVPS grew at an incredible 27.4% annual clip over the past two years (from $39.69 to $64.42 per share).
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, Ameriprise Financial has averaged an ROE of 56.5%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Ameriprise Financial has a strong competitive moat.
Final Judgment
Ameriprise Financial possesses several positive attributes. With its shares trailing the market in recent months, the stock trades at 13.2× forward P/E (or $518.26 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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