E Ameriprise Financial: This High-Quality Dividend Achiever Is Attractive

Ameriprise Financial (AMP) is a high-quality financial company, which is recovering strongly from the pandemic. The stock is one of the oldest holdings of Lyrical Asset Management, which is well-known for its expertise in pinpointing undervalued stocks with promising growth prospects. The stock of Ameriprise has retrieved all its pandemic-driven losses and thus it is currently hovering around its all-time highs. Nevertheless, it remains attractively valued.

Business overview

Ameriprise was founded in 1894. It is a leading financial services firm, with more than $1.0 trillion in assets under management. The company offers extensive wealth management and asset management capabilities to its customers.

Ameriprise experienced a severe downturn due to the coronavirus crisis last year. Due to the temporary collapse in the value of stocks and corporate bonds, the fees it received from its clients decreased. In addition, as is usual in brutal market sell-offs, many customers liquidated their positions. This helps explain the 54% plunge of the stock in about a month, at the onset of the coronavirus crisis last year.

However, the broad stock market has retrieved all its losses while the market is optimistic that the pandemic will subside at the second half of this year thanks to the massive distribution of vaccines all over the world. As a result, Ameriprise finished the year with strong results and its stock has returned close to its all-time highs.

In the fourth quarter, Ameriprise enjoyed nearly $15 billion in net inflows and thus its total assets under management exceeded $1 trillion for the first time in its history. The company thus offset the headwind from low-interest rates and grew its adjusted earnings per share 8% over the prior year’s quarter. As a result, its annual earnings per share fell only 13% over the prior year’s record level, from $16.10 to $14.08.

Growth

Ameriprise benefits from a strong long-term trend, namely the increasing wealth of the middle and high class. It also benefits from the long-term bull market of the stock market, which increases the value of the portfolios of investors and hence the fees that Ameriprise receives from its clients.

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