Financial Comparison: Ameriprise Financial (NYSE:AMP) versus Portman Ridge Finance (NASDAQ:PTMN)

Portman Ridge Finance (NASDAQ:PTMN) and Ameriprise Financial (NYSE:AMP) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Profitability

This table compares Portman Ridge Finance and Ameriprise Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portman Ridge Finance	-18.10%	12.04%	4.80%
Ameriprise Financial	17.14%	68.93%	2.03%

Risk & Volatility

Portman Ridge Finance has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Valuation & Earnings

This table compares Portman Ridge Finance and Ameriprise Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portman Ridge Finance	$62.43 million	1.87	-$5.93 million	($1.13)	-11.20
Ameriprise Financial	$17.26 billion	2.81	$3.40 billion	$29.43	17.31

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

Analyst Recommendations

This is a summary of recent recommendations for Portman Ridge Finance and Ameriprise Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portman Ridge Finance	0	1	0	0	2.00
Ameriprise Financial	1	4	2	1	2.38

Portman Ridge Finance currently has a consensus target price of $14.00, suggesting a potential upside of 10.58%. Ameriprise Financial has a consensus target price of $517.13, suggesting a potential upside of 1.50%. Given Portman Ridge Finance’s higher possible upside, equities research analysts plainly believe Portman Ridge Finance is more favorable than Ameriprise Financial.

Institutional and Insider Ownership

30.1% of Portman Ridge Finance shares are owned by institutional investors. Comparatively, 84.0% of Ameriprise Financial shares are owned by institutional investors. 2.1% of Portman Ridge Finance shares are owned by insiders. Comparatively, 0.7% of Ameriprise Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 14.8%. Ameriprise Financial pays an annual dividend of $6.40 per share and has a dividend yield of 1.3%. Portman Ridge Finance pays out -166.4% of its earnings in the form of a dividend. Ameriprise Financial pays out 21.7% 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 increased its dividend for 21 consecutive years. Portman Ridge Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Ameriprise Financial beats Portman Ridge Finance on 13 of the 18 factors compared between the two stocks.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, mezzanine, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

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.