On Sep 19, 2013, we reiterated our long-term recommendation on
Ameriprise Financial, Inc.
) at Neutral. This was based on the company's strong
second-quarter earnings and improvement in client activities.
However, sluggish economic recovery and rising expenses remain
causes of concern.
Ameriprise's second-quarter operating earnings surpassed the
Zacks Consensus Estimate. Results were aided by top-line growth,
partially offset by higher operating expenses.
We view Ameriprise as an asset for yield-seeking investors, given
the company's regular dividend payments and consistent share
repurchase programs. Ameriprise has been meaningfully deploying
capital to boost investors' confidence. Moreover, the company
operates a well-diversified portfolio that enables it to grow
organically. Additionally, from time to time, the company has
grown inorganically and restructured its portfolio to meet the
changing market demands in modern times.
The Zacks Consensus Estimate for 2013 increased 2.0% to $6.76 per
share over the last 60 days. For 2014, the Zacks Consensus
Estimate advanced 1.7% to $7.82 per share over the same time
frame. Hence, Ameriprise currently carries a Zacks Rank #2 (Buy).
On the flip side, increased expenses remain a major concern for
Ameriprise. Additionally, the sluggish economic recovery, low
interest-rate environment and the European sovereign debt crisis
can lead to outflows, decreased demand, management fee revenues
and reduced benefits from economies of scale.
Other Stocks to Consider
Some other investment management stocks worth a look include
GAMCO Investors, Inc.
Affiliated Managers Group Inc.
The Blackstone Group L.P.
). While GAMCO Investors carries a Zacks Rank #1 (Strong Buy),
both Affiliated Managers and Blackstone carry the same Zacks Rank
AFFIL MANAGERS (AMG): Free Stock Analysis
AMERIPRISE FINL (AMP): Free Stock Analysis
BLACKSTONE GRP (BX): Free Stock Analysis
GAMCO INVESTORS (GBL): Free Stock Analysis
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