Reviewing Invesco (IVZ) & Ameriprise Financial (AMP)

Invesco (NYSE:IVZ) and Ameriprise Financial (NYSE:AMP) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Valuation & Earnings

This table compares Invesco and Ameriprise Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Invesco $5.16 billion 1.59 $1.13 billion $2.70 7.39
Ameriprise Financial $12.03 billion 1.60 $1.48 billion $12.27 11.07

Ameriprise Financial has higher revenue and earnings than Invesco. Invesco is trading at a lower price-to-earnings ratio than Ameriprise Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Invesco and Ameriprise Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invesco 0 5 7 0 2.58
Ameriprise Financial 0 5 3 0 2.38

Invesco currently has a consensus target price of $34.75, indicating a potential upside of 74.27%. Ameriprise Financial has a consensus target price of $166.29, indicating a potential upside of 22.47%. Given Invesco’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Invesco is more favorable than Ameriprise Financial.

Dividends

Invesco pays an annual dividend of $1.20 per share and has a dividend yield of 6.0%. Ameriprise Financial pays an annual dividend of $3.60 per share and has a dividend yield of 2.7%. Invesco pays out 44.4% of its earnings in the form of a dividend. Ameriprise Financial pays out 29.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Invesco has raised its dividend for 9 consecutive years and Ameriprise Financial has raised its dividend for 8 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Invesco and Ameriprise Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invesco 21.64% 12.70% 3.61%
Ameriprise Financial 13.91% 36.15% 1.48%

Institutional & Insider Ownership

78.8% of Invesco shares are held by institutional investors. Comparatively, 81.4% of Ameriprise Financial shares are held by institutional investors. 1.8% of Invesco shares are held by company insiders. Comparatively, 1.5% of Ameriprise Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Invesco has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500.

Summary

Ameriprise Financial beats Invesco on 9 of the 17 factors compared between the two stocks.

Invesco Company Profile

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

Ameriprise Financial Company Profile

Ameriprise Financial, Inc., through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through Advice & Wealth Management, Asset Management, Annuities, and Protection segments. The Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage services primarily to retail clients through its advisors. The Asset Management segment offers investment management and advice, and investment products to retail, high net worth, and institutional clients through unaffiliated third party financial institutions and institutional sales force. This segment's products include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance, and annuity separate accounts; and institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds, and property funds. The Annuities segment provides variable and fixed annuity products to individual clients through affiliated and unaffiliated advisors, and financial institutions. The Protection segment offers various products to address the protection and risk management needs of retail clients, including life, disability income, and property casualty insurance through advisors and affinity relationships. The company was formerly known as American Express Financial Corporation and changed its name to Ameriprise Financial, Inc. in September 2005. Ameriprise Financial, Inc. was founded in 1894 and is headquartered in Minneapolis, Minnesota.

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