Recent Buy: Ameriprise Financial, Inc. (AMP)

I opened a new position with the purchase of Ameriprise Financial, Inc. (AMP)

16 shares @ $142.27 on 9/10/2018.

This increases my forward 12-month dividend income by $57.60 to a total of $6,606.56

I also updated my portfolio page to reflect the change.

My Thoughts

I first saw this company in an article on SeekingAlpha. What I normally do when I see a company that I am not familiar with, I like to go straight to FastGraph.com. This gives me a good summary of how a company has been doing and their projected future. When I saw the FastGraphs of Ameriprise Finacial, I knew I had to do more research on this company. I am very happy that I did.

AMP has a 5-year dividend yield average of 2.23% and currently, the company is at 2.65%. I did buy the company when it was yielding 2.53%, but that is ok. I do plan to lower my cost basis soon.

The dividend payout is only 30%. Which is very low considering that Ameriprise has a 5-year dividend growth rate of 17.8%. The most recent dividend increase came in a lot less at only 8.4%. Still, that is very acceptable in my book.

The information that stands out to me the most is the fact that this financial company did not cut its dividend during the 2008-2009 crash. Not only did it not cut the dividend it actually increased them. It increased its dividend by 14% in 20018 and 6% in 2009.

CFRA is expecting earnings growth of 18% for the next three years. CFRA predicts Earnings Per Shares (EPS) coming in at $14.65 this year and $15.85 for 2019. This is much higher than 2017 actual earning of $9.44.

AMP is undervalued, and I recommend it as a BUY at this time. I have a fair value price at $187.20. This means that AMP is 41.5% undervalued.

Source: Fastgraphs.com

What do you think of the company? Plan on owning it? or why not?

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Image by Sira Anamwong at FreeDigitalPhotos.net

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