Ameriprise Financial Services (NYSE: AMP) and Fortress Investment Group (NYSE:FIG) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Volatility and Risk
Ameriprise Financial Services has a beta of 1.93, indicating that its share price is 93% more volatile than the S&P 500. Comparatively, Fortress Investment Group has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.
81.7% of Ameriprise Financial Services shares are held by institutional investors. Comparatively, 40.2% of Fortress Investment Group shares are held by institutional investors. 1.5% of Ameriprise Financial Services shares are held by insiders. Comparatively, 45.2% of Fortress Investment Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Ameriprise Financial Services and Fortress Investment Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ameriprise Financial Services||$11.70 billion||2.09||$1.31 billion||$10.72||15.43|
|Fortress Investment Group||$1.16 billion||2.61||$180.64 million||$0.74||10.57|
Ameriprise Financial Services has higher revenue and earnings than Fortress Investment Group. Fortress Investment Group is trading at a lower price-to-earnings ratio than Ameriprise Financial Services, indicating that it is currently the more affordable of the two stocks.
Ameriprise Financial Services pays an annual dividend of $3.32 per share and has a dividend yield of 2.0%. Fortress Investment Group pays an annual dividend of $0.18 per share and has a dividend yield of 2.3%. Ameriprise Financial Services pays out 31.0% of its earnings in the form of a dividend. Fortress Investment Group pays out 24.3% 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. Fortress Investment Group has raised its dividend for 7 consecutive years. Fortress Investment Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Ameriprise Financial Services and Fortress Investment Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ameriprise Financial Services||14.24%||29.75%||1.31%|
|Fortress Investment Group||15.59%||58.82%||24.52%|
This is a breakdown of current ratings for Ameriprise Financial Services and Fortress Investment Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ameriprise Financial Services||0||4||4||0||2.50|
|Fortress Investment Group||0||2||0||0||2.00|
Ameriprise Financial Services presently has a consensus price target of $152.60, suggesting a potential downside of 7.77%. Fortress Investment Group has a consensus price target of $6.00, suggesting a potential downside of 23.27%. Given Ameriprise Financial Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Ameriprise Financial Services is more favorable than Fortress Investment Group.
Ameriprise Financial Services beats Fortress Investment Group on 9 of the 17 factors compared between the two stocks.
About Ameriprise Financial Services
Ameriprise Financial, Inc. is a financial services company that offers financial solutions to individual and institutional clients. The Company operates in five segments: Advice & Wealth Management; Asset Management; Annuities; Protection, and Corporate & Other. The Company uses Ameriprise Financial as its enterprise brand, as well as the name of its advisor network and certain of its retail products and services. The retail products and services that use the Ameriprise Financial brand include those that it provides through its advisors (financial planning, investment advisory accounts and retail brokerage services) and products and services that the Company markets directly to consumers or through affinity groups (personal auto and home insurance). The Company uses its RiverSource brand for its annuity and protection products issued by the RiverSource Life companies, including its life and disability income insurance products.
About Fortress Investment Group
Fortress Investment Group LLC (Fortress) is an investment management firm. The Company operates through segments, including private equity funds, permanent capital vehicles, credit hedge funds, credit PE funds, liquid hedge funds and Logan Circle. Its business is to sponsor the formation of, and provide investment management services for, various investment funds, permanent capital vehicles and related managed accounts (the Fortress Funds). Fortress’s sources of income from the Fortress Funds are management fees, incentive income and investment income on its investments in the funds. As of December 31, 2016, the Company’s private equity business manages approximately $13.5 billion of assets under management (AUM); credit funds business manages approximately $18.1 billion of AUM; liquid hedge funds business manages over $4.6 billion of AUM, and Logan Circle business manages approximately $33.4 billion of AUM.
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