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The company manages 112 four-star and five-star Morningstar mutual funds and through its network of more than 9,000 advisors, delivers comprehensive financial planning services to 2+ million customers–primarily those with $500,000 to $5 million of investable assets.
Ameriprise was founded in 1894 as Investors Syndicate and was later acquired by American Express (AXP) in 1984. In 2005, the entity was spun-off to AMEX shareholders.
Ameriprise is very shareholder-friendly. In the most recent quarter, the company increased its dividend by 11% and returned $478 million (or 111% of its operating earnings) to its shareholders through dividends and share repurchases.
Ameriprise’s current share repurchase authorization expires in June 2019 and has $2.5 billion of purchasing capability remaining, about 14% of its current market cap.
The company’s recent (April 24, 2017) first quarter earnings saw an adjusted earnings-per-share increase by 24% and its operating return on equity tick upwards by 220 basis points to 26.1%.
Ameriprise’s strong performance was driven by strong financial market performance, client inflows for wealth management, and improving advisor productivity.
Ameriprise’s competitive advantage comes from its brand recognition and the strong performance of its funds. The mass affluent are likely to work with Ameriprise because of its reputation and prestige.
The company is growing quickly and the current price is an attractive entry point. However, Ameriprise is not recession-resistant; expect the stock to perform well in bull markets and poorly during bear markets as clients (mistakenly) withdraw assets as markets decline.
Ben Reynolds is the owner and editor of Sure Dividend.
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