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

Analyst Recommendations

This is a breakdown of current recommendations for Ameriprise Financial Services and UBS AG, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameriprise Financial Services 0 4 4 0 2.50
UBS AG 0 3 6 0 2.67

Ameriprise Financial Services currently has a consensus price target of $147.10, suggesting a potential downside of 3.59%. Given Ameriprise Financial Services’ higher probable upside, research analysts plainly believe Ameriprise Financial Services is more favorable than UBS AG.

Earnings and Valuation

This table compares Ameriprise Financial Services and UBS AG’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ameriprise Financial Services $12.00 billion 1.91 $2.90 billion $8.78 17.38
UBS AG $30.48 billion 2.09 $3.94 billion $1.06 16.21

UBS AG has higher revenue and earnings than Ameriprise Financial Services. UBS AG is trading at a lower price-to-earnings ratio than Ameriprise Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Ameriprise Financial Services 11.81% 26.54% 1.20%
UBS AG 11.09% 7.80% 0.46%

Volatility & Risk

Ameriprise Financial Services has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500. Comparatively, UBS AG has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Institutional & Insider Ownership

79.4% of Ameriprise Financial Services shares are held by institutional investors. Comparatively, 31.4% of UBS AG shares are held by institutional investors. 1.5% of Ameriprise Financial Services shares are held by insiders. Comparatively, 1.0% of UBS AG shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Ameriprise Financial Services pays an annual dividend of $3.32 per share and has a dividend yield of 2.2%. UBS AG pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Ameriprise Financial Services pays out 37.8% of its earnings in the form of a dividend. UBS AG pays out 56.6% 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 Services has increased its dividend for 4 consecutive years and UBS AG has increased its dividend for 7 consecutive years. UBS AG is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ameriprise Financial Services beats UBS AG on 9 of the 17 factors compared between the two stocks.

About Ameriprise Financial Services

Ameriprise Financial, Inc. is a financial services company that offers financial solutions to individual and institutional clients. The Company operates in five segments: Advice & Wealth Management; Asset Management; Annuities; Protection, and Corporate & Other. The Company uses Ameriprise Financial as its enterprise brand, as well as the name of its advisor network and certain of its retail products and services. The retail products and services that use the Ameriprise Financial brand include those that it provides through its advisors (financial planning, investment advisory accounts and retail brokerage services) and products and services that the Company markets directly to consumers or through affinity groups (personal auto and home insurance). The Company uses its RiverSource brand for its annuity and protection products issued by the RiverSource Life companies, including its life and disability income insurance products.

About UBS AG

UBS Group AG is a holding company and conducts its operations through UBS AG and its subsidiaries. The Company comprises Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. Wealth Management division provides advice and tailored financial services to wealthy private clients around the world, except those served by Wealth Management Americas. Wealth Management Americas division is a wealth manager in the Americas in terms of financial advisor productivity and invested assets by financial advisor. Personal & Corporate Banking division provides financial products and services to private, corporate and institutional clients in Switzerland. Asset Management division provides investment management products and services, platform solutions and advisory support. Investment Bank division provides investment advice, financial solutions and capital markets access.

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