Virtus Investment Partners (NASDAQ:VRTS) and Ameriprise Financial (NYSE:AMP) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.
Risk & Volatility
Virtus Investment Partners has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.74, suggesting that its stock price is 74% more volatile than the S&P 500.
Dividends
Virtus Investment Partners pays an annual dividend of $3.28 per share and has a dividend yield of 1.3%. Ameriprise Financial pays an annual dividend of $4.16 per share and has a dividend yield of 1.7%. Virtus Investment Partners pays out 22.2% of its earnings in the form of a dividend. Ameriprise Financial pays out 25.8% 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. Virtus Investment Partners has raised its dividend for 3 consecutive years and Ameriprise Financial has raised its dividend for 11 consecutive years. Ameriprise Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Virtus Investment Partners and Ameriprise Financial's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Virtus Investment Partners | 9.48% | 20.04% | 3.80% |
| Ameriprise Financial | 15.16% | 33.79% | 1.38% |
Institutional and Insider Ownership
83.2% of Virtus Investment Partners shares are owned by institutional investors. Comparatively, 83.1% of Ameriprise Financial shares are owned by institutional investors. 5.2% of Virtus Investment Partners shares are owned by insiders. Comparatively, 1.5% of Ameriprise Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and price targets for Virtus Investment Partners and Ameriprise Financial, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Virtus Investment Partners | 0 | 1 | 3 | 0 | 2.75 |
| Ameriprise Financial | 0 | 1 | 8 | 0 | 2.89 |
Virtus Investment Partners currently has a consensus price target of $257.75, suggesting a potential upside of 3.59%. Ameriprise Financial has a consensus price target of $212.20, suggesting a potential downside of 11.98%. Given Virtus Investment Partners' higher probable upside, equities analysts plainly believe Virtus Investment Partners is more favorable than Ameriprise Financial.
Valuation & Earnings
This table compares Virtus Investment Partners and Ameriprise Financial's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Virtus Investment Partners | $563.25 million | 3.38 | $95.65 million | $14.80 | 16.78 |
| Ameriprise Financial | $12.97 billion | 2.17 | $1.89 billion | $16.10 | 15.00 |
Ameriprise Financial has higher revenue and earnings than Virtus Investment Partners. Ameriprise Financial is trading at a lower price-to-earnings ratio than Virtus Investment Partners, indicating that it is currently the more affordable of the two stocks.
Summary
Ameriprise Financial beats Virtus Investment Partners on 10 of the 17 factors compared between the two stocks.
