If you are interested in cashing in on Ameriprise Financial Inc’s (NYSE:AMP) upcoming dividend of $0.9 per share, you only have 3 days left to buy the shares before its ex-dividend date, 04 May 2018, in time for dividends payable on the 18 May 2018. Is this future income a persuasive enough catalyst for investors to think about Ameriprise Financial as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Ameriprise Financial
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is its annual yield among the top 25% of dividend payers?
- Does it consistently pay out dividends without missing a payment or significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How well does Ameriprise Financial fit our criteria?
The current trailing twelve-month payout ratio for the stock is 30.22%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 24.74%, leading to a dividend yield of around 2.72%. However, EPS should increase to $14.46, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of AMP it has increased its DPS from $0.6 to $3.6 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes AMP a true dividend rockstar. In terms of its peers, Ameriprise Financial generates a yield of 2.54%, which is on the low-side for Capital Markets stocks.
Keeping in mind the dividend characteristics above, Ameriprise Financial is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for AMP’s future growth? Take a look at our free research report of analyst consensus for AMP’s outlook.
- Valuation: What is AMP worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether AMP is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.