Critical Comparison: Ameriprise Financial (NYSE:AMP) & ONEX (OTCMKTS:ONEXF)

Ameriprise Financial (NYSE:AMP) and ONEX (OTCMKTS:ONEXF) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Earnings and Valuation

This table compares Ameriprise Financial and ONEX”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameriprise Financial	$18.48 billion	2.29	$3.56 billion	$36.36	12.75
ONEX	$899.00 million	6.49	$617.00 million	$8.87	9.58

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ameriprise Financial	20.57%	62.51%	2.11%
ONEX	68.63%	7.16%	4.75%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameriprise Financial	1	5	4	1	2.45
ONEX	0	1	2	0	2.67

Ameriprise Financial currently has a consensus price target of $540.33, indicating a potential upside of 16.53%. Given Ameriprise Financial’s higher possible upside, equities research analysts clearly believe Ameriprise Financial is more favorable than ONEX.

Volatility and Risk

Ameriprise Financial has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, ONEX has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

84.0% of Ameriprise Financial shares are held by institutional investors. Comparatively, 0.7% of ONEX shares are held by institutional investors. 0.6% of Ameriprise Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Ameriprise Financial pays an annual dividend of $6.40 per share and has a dividend yield of 1.4%. ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.3%. Ameriprise Financial pays out 17.6% of its earnings in the form of a dividend. ONEX pays out 3.3% 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. Ameriprise Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ameriprise Financial beats ONEX 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 ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.