We reaffirmed our long-term recommendation on
Ameriprise Financial, Inc.
) at Neutral. This was based on the company's third-quarter 2013
earnings that outpaced the Zacks Consensus Estimate. Further, we
expect the company to benefit from its efficient capital
deployment activities, strategic acquisitions and strong balance
sheet. However, a sluggish economic recovery and the existing low
interest-rate environment will keep the company's financials
under pressure in the near term.
Why This Stance?
Amerprise's third-quarter 2013 earnings surpassed the Zacks
Consensus Estimate. Further, this compared favorably with the
year-ago earnings. Results reflected top-line growth along with
improved AUM and assets under administration.
Amerprise enjoys a competitive edge over its peers owing to its
diverse and innovative portfolio of products and services that
cater to the dynamic market needs. Also, the company has been
raising its quarterly cash dividend since 2010, reflecting its
long-term strategy to enhance shareholder value.
Further, over the last 60 days, the Zacks Consensus Estimate for
2013 advanced 2.5% to $6.99 per share. Also, for 2014, it moved
north 1.4% to $7.93 per share. As a result, Amerprise currently
carries a Zacks Rank #2 (Buy).
However, Amerprise's asset management business is expected to
have a negative impact owing to the considerable outflows.
Further, the current macro economic headwinds across the industry
and the company's continuous increase in costs will put
considerable pressure on its bottom-line growth.
Other Stocks to Consider
Some better-ranked investment management firms include
Artisan Partners Asset Management Inc.
Kohlberg Kravis Roberts & Co. L.P.
Virtus Investment Partners, Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AMERIPRISE FINL (AMP): Free Stock Analysis
ARTISAN PTNR AM (APAM): Free Stock Analysis
KKR & CO LP (KKR): Free Stock Analysis
VIRTUS INVESTMT (VRTS): Free Stock Analysis
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