LPL Financial vs Ameriprise Financial Which Outperforms?

LPL Financial Holdings Inc. and Ameriprise Financial Inc. are two prominent players in the financial services industry, offering a range of investment products and services to individual and institutional clients. LPL Financial is known for its independent advisor platform, while Ameriprise is recognized for its comprehensive financial planning services. Both companies have experienced growth in recent years, but LPL has seen faster revenue growth. Investors looking to invest in these stocks should consider factors such as market performance, earnings potential, and overall market dynamics.

LPL Financial or Ameriprise Financial?

When comparing LPL Financial and Ameriprise Financial, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between LPL Financial and Ameriprise Financial.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. LPL Financial has a dividend yield of 0.36%, while Ameriprise Financial has a dividend yield of 1.05%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. LPL Financial reports a 5-year dividend growth of 3.71% year and a payout ratio of 8.94%. On the other hand, Ameriprise Financial reports a 5-year dividend growth of 8.47% year and a payout ratio of 20.91%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with LPL Financial P/E ratio at 24.56 and Ameriprise Financial's P/E ratio at 20.39. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. LPL Financial P/B ratio is 8.91 while Ameriprise Financial's P/B ratio is 9.66.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, LPL Financial has seen a 5-year revenue growth of 5.33%, while Ameriprise Financial's is 0.82%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with LPL Financial's ROE at 41.74% and Ameriprise Financial's ROE at 53.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $327.84 for LPL Financial and $546.91 for Ameriprise Financial. Over the past year, LPL Financial's prices ranged from $187.19 to $334.38, with a yearly change of 78.63%. Ameriprise Financial's prices fluctuated between $368.41 and $577.00, with a yearly change of 56.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.