Ameriprise Financial currently trades at $473.09 per share and has shown little upside over the past six months, posting a small loss of 3.9%. The stock also fell short of the S&P 500’s 5.6% gain during that period.
Given the weaker price action, is now a good time to buy AMP? Or should investors expect a bumpy road ahead? Find out in our full research report, it’s free.
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.
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 22.8% compounded annual growth rate over the last five years, higher than its 9.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.
Although Ameriprise Financial’s TBVPS increased by a meager 5.5% annually over the last five years, the good news is that its growth has recently accelerated as TBVPS grew at an incredible 43.5% annual clip over the past two years (from $21.02 to $43.27 per share).
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, Ameriprise Financial has averaged an ROE of 62.4%, 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.
These are just a few reasons Ameriprise Financial is a rock-solid business worth owning. With its shares trailing the market in recent months, the stock trades at 10.9× forward P/E (or $473.09 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
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