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After buying stock in a company, the worst outcome (assuming no leverage) is to lose all the money you put into it. But on a lighter note, a good company can see its stock price rise well over 100%. One great example is Ameriprise Financial Co., Ltd. (NYSE:AMP) stock is up 237% in five years. Shareholders will also be pleased to know that he is up 17% in the past three months. However, this could be related to the strong market, which is up 9.1% over the past three months.
So let’s do some research and see if the company’s long-term performance is in line with the progress of its underlying business.
Check out our latest analysis for Ameriprise Financial.
To paraphrase Benjamin Graham, in the short term the market is a voting machine, but in the long term it is a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can learn how investor attitudes to a company have changed over time.
Over five years, Ameriprise Financial was able to grow its earnings per share at 14% per year. This EPS growth rate is lower than the average annual increase in the share price of 27%. This suggests that market participants have been valuing the company highly recently. And this is not surprising given its track record of growth.
The image below shows how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Ameriprise Financial’s key metrics by checking out this interactive graph of Ameriprise Financial’s earnings, revenue and cash flow.
What will happen to the dividend?
When looking at return on investment, it is important to consider the following differences: Total shareholder return (TSR) and stock price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often much higher than the share price return. We note that Ameriprise Financial’s TSR over the last five years was 274%, which is better than the share price return mentioned above. Therefore, the dividend paid by the company is total Shareholder returns.
different perspective
Ameriprise Financial’s TSR for the year was 21%, roughly in line with the market average. It’s worth noting here that the TSR over five years is 30% per year, which is better. Although share price growth has slowed, the long-term story points to a business worth watching. It’s always interesting to track stock performance over the long term. But to understand Ameriprise Financial better, you need to consider many other factors.For example, taking risks – Ameriprise Financial is two warning signs I think you should know.
Ameriprise Financial would be even more likable if we see some significant insider buying.While you wait, check this out free A list of growing companies with significant recent insider purchasing.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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