Analyzing Ameriprise Financial (NYSE:AMP) & Morgan Stanley Direct Lending Fund (NYSE:MSDL)

Ameriprise Financial (NYSE:AMP) and Morgan Stanley Direct Lending Fund (NYSE:MSDL) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Ameriprise Financial and Morgan Stanley Direct Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ameriprise Financial	20.24%	64.19%	2.15%
Morgan Stanley Direct Lending Fund	15.97%	9.61%	4.28%

Risk & Volatility

Ameriprise Financial has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Morgan Stanley Direct Lending Fund has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Ameriprise Financial and Morgan Stanley Direct Lending Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameriprise Financial	1	5	5	1	2.50
Morgan Stanley Direct Lending Fund	0	6	1	0	2.14

Ameriprise Financial presently has a consensus target price of $572.55, suggesting a potential upside of 16.13%. Morgan Stanley Direct Lending Fund has a consensus target price of $15.50, suggesting a potential upside of 17.83%. Given Morgan Stanley Direct Lending Fund’s higher possible upside, analysts plainly believe Morgan Stanley Direct Lending Fund is more favorable than Ameriprise Financial.

Dividends

Ameriprise Financial pays an annual dividend of $6.80 per share and has a dividend yield of 1.4%. Morgan Stanley Direct Lending Fund pays an annual dividend of $1.80 per share and has a dividend yield of 13.7%. Ameriprise Financial pays out 16.4% of its earnings in the form of a dividend. Morgan Stanley Direct Lending Fund pays out 260.9% 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 increased its dividend for 21 consecutive years.

Earnings and Valuation

This table compares Ameriprise Financial and Morgan Stanley Direct Lending Fund”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameriprise Financial	$18.48 billion	2.40	$3.56 billion	$41.46	11.89
Morgan Stanley Direct Lending Fund	$72.45 million	15.27	$122.09 million	$0.69	19.07

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

Insider and Institutional Ownership

84.0% of Ameriprise Financial shares are held by institutional investors. 0.6% of Ameriprise Financial shares are held by company insiders. Comparatively, 0.3% of Morgan Stanley Direct Lending Fund shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Ameriprise Financial beats Morgan Stanley Direct Lending Fund on 13 of the 18 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 Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.