Ameriprise Financial Inc. $AMP is a company rarely mentioned among the top stocks in the financial sector. However, despite the lack of recognition it has been one of the better performers over the last decade, providing investors with 10.7% annualized total returns against 6.5% from the S&P.

Ameriprise entered my portfolio in September of 2014, and has given me  a roller-coaster ride during the time I’ve owned it.

I bought at $124, and saw it continue higher into 2015 before the share price took a big hit and fell to a low of around $76 in February of 2016. Since then it has moved higher and is now once again approaching all-time highs.

The round trip is now complete, and I am up about 10% on a total return basis over the period.

Roller-coaster Price, Stair Step Dividend

There was plenty of volatility in the share price, but the dividend has done nothing but go up since I bought. Here are the dividend increases declared since I made my investment:

• April 22, 2015 – Announced 15.52% dividend increase, from $0.58 to $0.67 per share.
• April 27, 2016 – Announced an 11.94% dividend increase, from $0.67 to $0.75 per share.

This trend continued on Monday, as the company announced a 10.67% dividend increase with its earning release at the close. This boost to the dividend was in line with my prediction for the company, and continues the trend of double-digit or better dividend growth.

Buyback And Acquisition Is Icing On Top

In addition to the nice dividend increase, the board also authorized an additional $2.5 billion in share repurchases. This authorization runs through June of 2019 and equates to about 12.5% of outstanding shares at current prices.

It’s easy to be skeptical when it comes to share buybacks, but Ameriprise is a company that has done an excellent job of retiring shares over the years.

Since 2012, Ameriprise has managed to cut the number of diluted shares outstanding from 223 million to 160.1 million at end of Q1, a reduction of nearly 30%. With roughly 2 years to complete the new program, the reduction in share count could easily add another 4-5% per year of EPS growth on top of growth from its business.

Speaking of growth, Ameriprise released some other positive news this morning with the agreement to acquire Investment Professionals, Inc., an independent broker-dealer based in San Antonio, Texas.

Investment Professionals had over 200 financial advisors and assets totaling over $8B, compared with $818B for Ameriprise. In absolute numbers, the ~1% increase in assets doesn’t move the needle much, but it does provide Ameriprise with access to new markets, cross-selling of products, and potential cost savings that might be able to add another point or two to earnings growth.

Q1 Results And Looking Ahead

Today’s earnings release was a positive one, as operated EPS of $2.70 came in $0.18 above estimates, a beat of 7.1%. The company also beat on the top line, with revenues of $2.9B coming in $10M above consensus.

As mentioned above, Ameriprise has produced earnings growth of around 10% over the last decade. Analysts are expecting that to accelerate going forward, as they are expecting 26% EPS growth in 2017 and 16.4% annualized growth going forward. With today’s 7% earnings beat I expect that the 2017 EPS numbers will be moved higher as well.

Shares are trading near $131, which provides a PE of around 12.2 on the current EPS estimate. This compares favorably with the long-term trend, as Ameriprise normally trades around the 12.5 PE level.

Between a forward yield of 2.5% after the dividend increase, attractive valuation compared to historical norms, and growth expectations in the mid-teens, this looks like an attractive entry point on the stock.

The aggressive share repurchases give a nice tailwind to earnings growth, and even if Ameriprise fails to match the higher growth expectations, it should still be able to match its historical growth rate.

Summary And Conclusion

Despite not getting much love from the dividend growth community, Ameriprise Financial has done an excellent job of providing out-sized returns for investors. It has regularly produced double-digit earnings growth and aggressively reduced the share count while increasing dividends; a perfect combination for positive long-term results.

Analysts are bullish on its growth prospects going forward, and with shares trading near fair value, this appears to be a decent entry point for investors.

I hadn’t been giving it much consideration for new capital in my portfolio, but it has moved up the list a bit after today’s results. However, even if I don’t new capital to work in it, I’ll gladly continue to reinvest dividends and maintain ownership in this impressive company.