Head to Head Review: Ameriprise Financial (NYSE:AMP) & MSCI (NYSE:MSCI)

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

Volatility and Risk

Ameriprise Financial has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, MSCI has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Ameriprise Financial and MSCI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameriprise Financial	1	5	5	1	2.50
MSCI	0	0	11	1	3.08

Ameriprise Financial currently has a consensus price target of $572.55, suggesting a potential upside of 15.39%. MSCI has a consensus price target of $701.17, suggesting a potential upside of 24.98%. Given MSCI’s stronger consensus rating and higher possible upside, analysts clearly believe MSCI 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%. MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.5%. Ameriprise Financial pays out 16.4% of its earnings in the form of a dividend. MSCI pays out 44.9% 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 has raised its dividend for 21 consecutive years and MSCI has raised its dividend for 11 consecutive years.

Profitability

This table compares Ameriprise Financial and MSCI’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%
MSCI	40.74%	-55.19%	24.90%

Valuation & Earnings

This table compares Ameriprise Financial and MSCI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameriprise Financial	$18.48 billion	2.41	$3.56 billion	$41.46	11.97
MSCI	$3.13 billion	13.01	$1.20 billion	$18.28	30.69

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

Institutional & Insider Ownership

84.0% of Ameriprise Financial shares are owned by institutional investors. Comparatively, 90.0% of MSCI shares are owned by institutional investors. 0.6% of Ameriprise Financial shares are owned by insiders. Comparatively, 3.8% of MSCI shares are owned by 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

MSCI beats Ameriprise Financial on 11 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 MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.