Sprott (NYSE:SII) versus Ameriprise Financial (NYSE:AMP) Critical Analysis

Ameriprise Financial (NYSE:AMP) and Sprott (NYSE:SII) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Ameriprise Financial and Sprott, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameriprise Financial	2	5	3	1	2.27
Sprott	0	2	3	0	2.60

Ameriprise Financial currently has a consensus target price of $533.33, indicating a potential upside of 6.32%. Sprott has a consensus target price of $132.00, indicating a potential upside of 31.30%. Given Sprott’s stronger consensus rating and higher possible upside, analysts clearly believe Sprott is more favorable than Ameriprise Financial.

Dividends

Ameriprise Financial pays an annual dividend of $6.40 per share and has a dividend yield of 1.3%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.6%. Ameriprise Financial pays out 17.5% of its earnings in the form of a dividend. Sprott pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameriprise Financial has raised its dividend for 21 consecutive years and Sprott has raised its dividend for 1 consecutive years.

Institutional and Insider Ownership

84.0% of Ameriprise Financial shares are owned by institutional investors. Comparatively, 28.3% of Sprott shares are owned by institutional investors. 0.7% of Ameriprise Financial shares are owned by company insiders. Comparatively, 18.3% of Sprott shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Ameriprise Financial and Sprott”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameriprise Financial	$17.26 billion	2.70	$3.40 billion	$36.47	13.75
Sprott	$178.65 million	14.51	$49.29 million	$1.95	51.56

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ameriprise Financial	20.12%	64.97%	2.05%
Sprott	23.26%	15.01%	11.97%

Volatility and Risk

Ameriprise Financial has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Sprott has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Summary

Ameriprise Financial beats Sprott on 9 of the 17 factors compared between the two stocks.

About Ameriprise Financial

Ameriprise Financial, Inc., together with its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through four segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice; brokerage products and services for retail and institutional clients; discretionary and non-discretionary investment advisory accounts; mutual funds; insurance and annuities products; cash management and banking products; and face-amount certificates. The Asset Management segment offers investment management, advice, and products to retail, high net worth, and institutional clients through third-party financial institutions, advisor networks, direct retail, and its institutional sales force under the Columbia Threadneedle Investments brand name. This segment products include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance, and annuity separate accounts; and institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds, and property and infrastructure funds. The Retirement & Protection Solutions segment provides variable annuity products, as well as life and disability income insurance products to retail clients. The company was formerly known as American Express Financial Corporation and changed its name to Ameriprise Financial, Inc. in September 2005. Ameriprise Financial, Inc. was founded in 1894 and is headquartered in Minneapolis, Minnesota.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.