Should Value Investors Buy Ameriprise Financial (AMP) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Ameriprise Financial (AMP) is a stock many investors are watching right now. AMP is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.26. This compares to its industry's average Forward P/E of 13.07. Over the past 52 weeks, AMP's Forward P/E has been as high as 15.63 and as low as 10.72, with a median of 13.43.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AMP has a P/S ratio of 2.58. This compares to its industry's average P/S of 2.99.

Finally, investors will want to recognize that AMP has a P/CF ratio of 15.60. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AMP's current P/CF looks attractive when compared to its industry's average P/CF of 30.26. AMP's P/CF has been as high as 23.08 and as low as 14.74, with a median of 17.06, all within the past year.

These are just a handful of the figures considered in Ameriprise Financial's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AMP is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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