Victory Capital (NASDAQ:VCTR) and Ameriprise Financial (NYSE:AMP) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
Profitability
This table compares Victory Capital and Ameriprise Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Victory Capital | 20.18% | 43.88% | 14.00% |
| Ameriprise Financial | 15.16% | 33.79% | 1.38% |
Dividends
Victory Capital pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Ameriprise Financial pays an annual dividend of $4.16 per share and has a dividend yield of 2.2%. Victory Capital pays out 11.3% of its earnings in the form of a dividend. Ameriprise Financial pays out 25.8% 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. Victory Capital has raised its dividend for 1 consecutive years and Ameriprise Financial has raised its dividend for 10 consecutive years. Ameriprise Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Victory Capital and Ameriprise Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Victory Capital | 2 | 3 | 4 | 0 | 2.22 |
| Ameriprise Financial | 0 | 1 | 10 | 0 | 2.91 |
Victory Capital currently has a consensus price target of $20.84, indicating a potential downside of 12.38%. Ameriprise Financial has a consensus price target of $185.73, indicating a potential downside of 2.09%. Given Ameriprise Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Ameriprise Financial is more favorable than Victory Capital.
Valuation and Earnings
This table compares Victory Capital 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 | |
| Victory Capital | $612.37 million | 2.62 | $92.49 million | $2.48 | 9.59 |
| Ameriprise Financial | $12.97 billion | 1.73 | $1.89 billion | $16.10 | 11.78 |
Ameriprise Financial has higher revenue and earnings than Victory Capital. Victory Capital is trading at a lower price-to-earnings ratio than Ameriprise Financial, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
18.1% of Victory Capital shares are held by institutional investors. Comparatively, 80.4% of Ameriprise Financial shares are held by institutional investors. 10.2% of Victory Capital shares are held by insiders. Comparatively, 1.5% of Ameriprise Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Victory Capital has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Ameriprise Financial has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.
Summary
Ameriprise Financial beats Victory Capital on 11 of the 17 factors compared between the two stocks.
Victory Capital Company Profile
Victory Capital Holdings, Inc. engages in the provision of investment management products and services to institutional and intermediary clients. The company sells and distributes its products through centralized distribution model, broker-dealers, retirement platforms, and registered investment advisor networks. Its model features an operating platform that provides centralized distribution, marketing, and operations infrastructure to its franchises and solutions platform. The company was founded on February 13, 2013 and is headquartered in San Antonio, TX.
Ameriprise Financial Company Profile
Ameriprise Financial, Inc., through its subsidiaries, provides various financial products and services to individual and institutional clients in the United States and internationally. It operates through five segments: Advice & Wealth Management, Asset Management, Annuities, Protection, and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage services primarily to retail clients through its advisors. The Asset Management segment offers investment management, advice, and investment products to retail, high net worth, and institutional clients through unaffiliated third party financial institutions and institutional sales force. Its products also 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 funds. The Annuities segment provides variable and fixed annuity products to individual clients through affiliated and unaffiliated advisors, and financial institutions. The Protection segment offers variable and fixed annuity products to address the protection and risk management needs of retail clients, including life and disability income insurance. The Corporate & Other segment consist of long term care business, net investment income or loss on corporate level assets. 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.