Ameriprise Financial

Methodology

Ameriprise's wealth management and asset management businesses produce relatively stable earnings from advisory fees, though market sensitivity affects asset values and fee income. The company's shift toward advisory and away from variable annuities has improved earnings quality and predictability. This calculation works reasonably well given the recurring revenue model, though equity market volatility and interest rate changes can impact near-term results.

Methodology

Ameriprise often trades at attractive PEG ratios reflecting the capital-light wealth management model with steady client asset growth. The company's exposure to rising equity markets provides leverage during bull markets but creates sensitivity during corrections. Compare to other wealth managers and broker-dealers to assess whether Ameriprise's advisor productivity and market positioning justify its current multiple.

Methodology

Ameriprise's modest but growing dividend combined with substantial share buybacks makes PEGY relevant for total return assessment. The company's strong free cash flow generation from advisory fees supports aggressive capital returns to shareholders. PEGY better captures the full shareholder value proposition, where management's capital allocation discipline enhances returns beyond operational growth alone.