Ameriprise Financial Inc Valuation – January 2019 $AMP

Company Profile (excerpt from Reuters): Comcast Corporation, incorporated on December 7, 2001, is a media and technology company. The Company has two primary businesses: Comcast Cable and NBCUniversal. The Company’s Comcast Cable business operates in the Cable Communications segment. Its NBCUniversal business operates in four business segments: Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks (collectively, the NBCUniversal segments). Its other business interests consist primarily of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses.


Downloadable PDF version of this valuation:

ModernGraham Valuation of AMP – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $15,808,544,980 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 166.04% Pass
5. Moderate PEmg Ratio PEmg < 20 10.96 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.96 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass


Stage 2: Determination of Intrinsic Value

EPSmg $10.35
MG Growth Estimate 9.69%
MG Value $288.60
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $150.12
MG Value based on 0% Growth $88.00
Market Implied Growth Rate 1.23%
Current Price $113.44
% of Intrinsic Value 39.31%

Ameriprise Financial, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $6.29 in 2014 to an estimated $10.35 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.23% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Ameriprise Financial, Inc. revealed the company was trading above its Graham Number of $112.58. The company pays a dividend of $3.24 per share, for a yield of 2.9%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 10.96, which was below the industry average of 18, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Ameriprise Financial, Inc. performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Graham Number $112.58
PEmg 10.96
PB Ratio 2.96
Dividend Yield 2.86%
TTM Dividend $3.24
Number of Consecutive Years of Dividend Growth 13

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Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $4,240,000,000
Total Assets $145,191,000,000
Intangible Assets $0
Total Liabilities $139,573,000,000
Shares Outstanding (Diluted Average) 146,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $13.77
Dec2017 $9.44
Dec2016 $7.81
Dec2015 $8.48
Dec2014 $8.30
Dec2013 $6.44
Dec2012 $4.62
Dec2011 $4.53
Dec2010 $4.18
Dec2009 $2.95
Dec2008 -$0.16
Dec2007 $3.39
Dec2006 $2.54
Dec2005 $2.32
Dec2004 $3.22
Dec2003 $2.95

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $10.35
Dec2017 $8.46
Dec2016 $7.69
Dec2015 $7.25
Dec2014 $6.29
Dec2013 $5.04
Dec2012 $3.97
Dec2011 $3.42
Dec2010 $2.77
Dec2009 $2.11
Dec2008 $1.88
Dec2007 $2.90
Dec2006 $2.50
Dec2005 $2.22
Dec2004 $1.86
Dec2003 $0.98

Recommended Reading:

Other ModernGraham posts about the company

5 Undervalued Stocks for Value Investors with a High Beta – July 2018
10 Best Dividend Paying Stocks for the Enterprising Investor – May 2018
10 Undervalued Stocks for the Enterprising Investor – April 2018
Ameriprise Financial Inc Valuation – March 2018 $AMP
10 Companies Benjamin Graham Would Invest In Today – June 2016

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The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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