Yahoo Finance Should You Consider Ameriprise Financial, Inc. (NYSE:AMP)?
Attractive stocks have exceptional fundamentals. In the case of Ameriprise Financial, Inc. (NYSE:AMP), there's is a financially-sound company with a great history of performance, trading at a discount. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, take a look at the report on Ameriprise Financial here.
Undervalued with solid track record and pays a dividend
Over the past year, AMP has grown its earnings by 11%, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 32% return to shareholders, which is what investors like to see! AMP is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that AMP has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. AMP appears to have made good use of debt, producing operating cash levels of 0.61x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
AMP's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of AMP's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the diversified financials industry, AMP is also trading below its peers, relative to earnings generated. This further reaffirms that AMP is potentially undervalued.
Next Steps:
For Ameriprise Financial, there are three fundamental factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for AMP’s future growth? Take a look at our free research report of analyst consensus for AMP’s outlook.
Dividend Income vs Capital Gains: Does AMP return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AMP as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AMP? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
