February 29, 2008 - Ameriprise Financial (AMP-NYSE) is a leading provider of financial advice. The company (formerly American Express Financial) offers financial planning, products, and services to individual and institutional investors, primarily in the US. Through Ameriprise Financial Services and other affiliates, the company -- spun off from American Express (AmEx) in 2005 -- offers insurance, mutual funds, college savings plans, personal trust services, retail brokerage, and other products and services. It distributes its products primarily through its more than 12,000 financial advisors (including employees, franchisees, affiliates, and the Securities America broker-dealer subsidiary).

Earnings are growing at a nice pace. They finished 2007 at $4.03 a share, up from $3.48 the previous year. This year analysts suggest they'll be $4.50. Over the next 5 years, they think eps will grow by 9.5% a year, on average with revenues increasing by 7.0% in the same time period. In the fourth quarter of last year, in spite of a difficult stock market, revenues climbed by 7% compared to the same quarter last year while earnings were up 14% vs. last year's same quarter. Management is cutting costs in this tumultous time, slowing new investment in products and services, and reducing new hires. Productivity, as measured by net revenue per financial adviser, improved by 11% in the last quarter of 2007.

Growth is coming from the core competency of AMP: the affluent individual or family. Assets from this sector grew by 10% in the fourth quarter. With increased advertising focused on baby boomers, asets have risen in the last 3 quarters in contrast to large outflows in previous quarters.

There's very little of subprime debt in AMP's $10 billion structured assets, less than 3%. Most of those funds are invested in AAA rated securities. Total assets under management are close to $500 billion.

Other numbers: The stock's price has taken a breather since hitting its all-time high last year at $69.30, now down about 20%. Current assets overwhelm current liabilities by almost 7 to 1. Return on Equity was 10.5% in 2007 with analysts predicting 12% for 2008. Net profit margin was 11.2% last year with expectations of 11.8% this year. Debt is 22% of capital.

AMB is gathering more assets, cutting costs and delivering good earnings. While not spectacular in growth, they are going up at a nice pace, especially when compared to many other companies which are losing money. Of course, if the stock market gets hit dramatically, outflows will once again hit AMP and the valuation of the portfolios, meaning lower fee income. But some of the stock money would undoubtedly transfer to money market or debt funds managed by the company. This is a solid stock that is worth more of any investor's time if a financial service investment is of consideration.

- Company Web site: www.ameriprise.com

- Ted Allrich