5 Reasons Why Ameriprise (AMP) Stock is an Attractive Pick Now

It seems to be a wise idea to add Ameriprise Financial, Inc. AMP stock to your portfolio now. The company’s diversified investment portfolio and solid restructuring initiatives are expected to keep aiding growth. Also, its solid assets under management (AUM) balance will likely continue to support the top line.

Moreover, analysts are optimistic regarding AMP’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for its current-year earnings has been revised marginally upward. Thus, AMP currently carries a Zacks Rank #2 (Buy).

Looking at the company’s price performance, its shares have gained 1.1% over the past year against the industry’s decline of 10.2%.


Zacks Investment Research
Image Source: Zacks Investment Research


Below we have mentioned some other factors that make Ameriprise an attractive investment option now.

Earnings per Share (EPS) Growth: Over the last three to five years, the company witnessed EPS growth of 14.2%, higher than the industry’s average of 9.8%. The upward trend is expected to continue in the near term, as indicated by its projected EPS growth rate of 22.1% for 2023 and 8.1% for 2024.

Further, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 5.5%.

Revenue Strength: Ameriprise constantly modifies its product and service offering capacity to keep pace with dynamic market needs. The strategy, along with growth in AUM, has helped it register top-line growth. Total net revenues (GAAP basis) witnessed a CAGR of 2.7% over the five years between 2018 and 2022.

The company’s efforts to launch products are likely to keep supporting top-line growth in the quarters ahead. Its estimated sales growth rates of 7.1% for 2023 and 6% for 2024 ensure the continuation of the upward trend in revenues.

Steady Capital Deployments: Ameriprise manages its capital levels efficiently. In April 2022, it announced a dividend hike for the 15th time since 2010. In January, its board of directors authorized an additional repurchase plan worth $3 billion (expiring on Mar 31, 2024). As of Dec 31, 2022, the company had $1.63 billion worth of shares left to be repurchased.

Given a strong balance sheet and liquidity position, Ameriprise is expected to sustain efficient capital deployment activities in the future, thus enhancing shareholder value.

Superior Return on Equity (ROE): The company’s ROE of 70.64% compares favorably with the industry’s ROE of 12.69%. This reflects its efficiency in utilizing shareholders’ funds.

Favorable Valuation: Ameriprise stock seems undervalued right now than the broader industry. Its current price-earnings (F1) and PEG ratios are lower than the industry averages.

Moreover, the stock has a Value Score of A. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.

Other Stocks to Consider

A couple of other top-ranked stocks from the finance space are The Bank of New York Mellon Corporation BK and First Horizon Corporation FHN. Both companies currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings estimates for BK have been revised 2.5% upward for 2023 over the past 60 days. BNY Mellon’s share price has rallied 13.2% over the past six months.

First Horizon’s earnings estimates have been revised upward by 1% for the current year over the past 60 days. In six months’ time, FHN’s share price has declined 25%.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report

Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report

First Horizon Corporation (FHN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.