Ameriprise Financial (NYSE:AMP) and Invesco (NYSE:IVZ) Critical Contrast
by Kim Johansen · The Markets DailyInvesco (NYSE:IVZ – Get Free Report) and Ameriprise Financial (NYSE:AMP – Get Free Report) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.
Dividends
Invesco pays an annual dividend of $0.86 per share and has a dividend yield of 3.2%. Ameriprise Financial pays an annual dividend of $6.80 per share and has a dividend yield of 1.3%. Invesco pays out -124.6% of its earnings in the form of a dividend. Ameriprise Financial pays out 15.3% 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 increased its dividend for 5 consecutive years and Ameriprise Financial has increased its dividend for 21 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
66.1% of Invesco shares are owned by institutional investors. Comparatively, 83.9% of Ameriprise Financial shares are owned by institutional investors. 1.4% of Invesco shares are owned by company insiders. Comparatively, 0.6% of Ameriprise Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Invesco and Ameriprise Financial, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Invesco | 0 | 8 | 5 | 1 | 2.50 |
| Ameriprise Financial | 2 | 5 | 4 | 1 | 2.33 |
Invesco currently has a consensus price target of $33.79, indicating a potential upside of 24.87%. Ameriprise Financial has a consensus price target of $557.00, indicating a potential upside of 9.45%. Given Invesco’s stronger consensus rating and higher possible upside, research analysts clearly believe Invesco is more favorable than Ameriprise Financial.
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 | -1.10% | 13.49% | 5.23% |
| Ameriprise Financial | 20.99% | 69.94% | 2.22% |
Earnings and Valuation
This table compares Invesco and Ameriprise Financial”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Invesco | $7.14 billion | 1.68 | -$281.70 million | ($0.69) | -39.22 |
| Ameriprise Financial | $19.83 billion | 2.23 | $3.56 billion | $44.45 | 11.45 |
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.
Volatility and Risk
Invesco has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.
Summary
Ameriprise Financial beats Invesco on 9 of the 17 factors compared between the two stocks.
About Invesco
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 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.
About Ameriprise Financial
Ameriprise Financial, Inc., together with its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice; brokerage products and services for retail and institutional clients; discretionary and non-discretionary investment advisory accounts; mutual funds; insurance and annuities products; cash management and banking products; and face-amount certificates. The Asset Management segment offers investment management, advice, and products to retail, high net worth, and institutional clients through third-party financial institutions, advisor networks, direct retail, and its institutional sales force under the Columbia Threadneedle Investments brand name. This segment 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 and infrastructure funds. The Retirement & Protection Solutions segment provides variable annuity products, as well as life and disability income insurance products to retail clients. 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.