Garrison Capital (NASDAQ: GARS) and Ameriprise Financial Services (NYSE:AMP) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Garrison Capital and Ameriprise Financial Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Garrison Capital $42.95 million 3.12 -$4.80 million $0.34 24.56
Ameriprise Financial Services $11.70 billion 2.00 $1.31 billion $10.72 14.76

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

Volatility & Risk

Garrison Capital has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Ameriprise Financial Services has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.4%. Ameriprise Financial Services pays an annual dividend of $3.32 per share and has a dividend yield of 2.1%. Garrison Capital pays out 329.4% 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 Services pays out 31.0% of its earnings in the form of a dividend. Ameriprise Financial Services has raised its dividend for 7 consecutive years.

Profitability

This table compares Garrison Capital and Ameriprise Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital 14.66% 9.33% 4.49%
Ameriprise Financial Services 14.24% 29.75% 1.31%

Analyst Recommendations

This is a summary of current recommendations and price targets for Garrison Capital and Ameriprise Financial Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Ameriprise Financial Services 0 4 4 0 2.50

Garrison Capital currently has a consensus price target of $10.33, indicating a potential upside of 23.75%. Ameriprise Financial Services has a consensus price target of $152.60, indicating a potential downside of 3.59%. Given Garrison Capital’s higher probable upside, research analysts clearly believe Garrison Capital is more favorable than Ameriprise Financial Services.

Institutional and Insider Ownership

20.3% of Garrison Capital shares are owned by institutional investors. Comparatively, 80.9% of Ameriprise Financial Services shares are owned by institutional investors. 5.8% of Garrison Capital shares are owned by company insiders. Comparatively, 1.5% of Ameriprise Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Ameriprise Financial Services beats Garrison Capital on 11 of the 17 factors compared between the two stocks.

Garrison Capital Company Profile

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

Ameriprise Financial Services Company Profile

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.

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