Ameriprise Financial (NYSE:AMP) and Invesco (NYSE:IVZ) Head-To-Head Analysis

Ameriprise Financial (NYSE:AMP) and Invesco (NYSE:IVZ) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Ameriprise Financial and Invesco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameriprise Financial	2	5	4	1	2.33
Invesco	0	8	5	1	2.50

Ameriprise Financial presently has a consensus price target of $557.00, indicating a potential upside of 13.40%. Invesco has a consensus price target of $33.79, indicating a potential upside of 21.95%. Given Invesco’s stronger consensus rating and higher possible upside, analysts clearly believe Invesco is more favorable than Ameriprise Financial.

Profitability

This table compares Ameriprise Financial and Invesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ameriprise Financial	20.99%	69.94%	2.22%
Invesco	-1.10%	12.65%	5.23%

Earnings and Valuation

This table compares Ameriprise Financial and Invesco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameriprise Financial	$18.48 billion	2.39	$3.56 billion	$44.45	11.05
Invesco	$6.38 billion	1.93	-$281.70 million	($0.69)	-40.16

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.

Dividends

Ameriprise Financial pays an annual dividend of $6.80 per share and has a dividend yield of 1.4%. Invesco pays an annual dividend of $0.86 per share and has a dividend yield of 3.1%. Ameriprise Financial pays out 15.3% of its earnings in the form of a dividend. Invesco pays out -124.6% 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. Ameriprise Financial has increased its dividend for 21 consecutive years and Invesco has increased its dividend for 5 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

84.0% of Ameriprise Financial shares are held by institutional investors. Comparatively, 66.1% of Invesco shares are held by institutional investors. 0.6% of Ameriprise Financial shares are held by insiders. Comparatively, 1.4% of Invesco shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Ameriprise Financial has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Invesco has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500.

Summary

Ameriprise Financial beats Invesco on 9 of the 17 factors compared between the two stocks.

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.

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.