Ameriprise Hikes Dividend As Industry Recovers

Shutterstock photo

Financial services companyAmeriprise Financial ( AMP ), now trading at record highs, has just raised its quarterly dividend.

The new dividend, which was declared in April and went into effect last week, is 52 cents a share, up from 45 cents. It was also the sixth time Ameriprise has raised the dividend in the past three years.

At the new rate, the annualized dividend yield is about 2.5%.

The firm is part of an investment banking and brokerage industry that has been rising slowly in IBD's 197 group rankings. It ranked No. 42 as of Thursday.

In its first-quarter earnings report, Ameriprise said its fee-based businesses are leading the company's growth. The firm's services include retirement planning, mutual funds and insurance.

Ameriprise has one of the most steady earnings performance histories in the industry group. Its three-year Earnings Stability Factor is 8.

The big-cap company's results were far from steady during the financial crisis. Results suffered in 2008 and part of 2009. But Ameriprise didn't cut its dividend.

The wealth management industry is making a comeback after taking a beating in the financial crisis, according to a study by Sanford C. Bernstein & Co. quoted in a Reuters article May 6. The biggest part of the industry's growth is in services for the wealthiest clients.

The stock's ownership includes an unusual mix of well-regarded value funds and growth funds.

That's despite an uneven earnings performance in the past four quarters: -15% and then gains of 11%, 31% and 10%. Sales growth accelerated modestly in recent quarters.

After upward revisions, analysts expect an 18% EPS rise for 2013 and 16% for 2014.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Investing Ideas

More from Investor's Business Daily


Investor's Business Daily

Investor's Business Daily

Follow on:

Research Brokers before you trade

Want to trade FX?

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by