AMP Limited (AMP)

By Jason Fittler

AMP is an Australasian wealth manager and life insurer.

The group comprises AMP Financial Services, which owns an Australian financial planning network, and AMP Capital Investors, a fund manager.

AMP Financial Services provides customers in Australia and New Zealand with financial advice, superannuation, retirement income and other investment products, superannuation services for businesses, income protection, disability and life insurance and selected banking products.

These products and services are primarily distributed through a network of more than 4,100 aligned and employed advisers and planners in Australia and New Zealand, as well as through relationships with independent financial advisers.

This sector has been out of favour since the GFC, income has been down as investors look to cash for safety and security. The sector is now starting to pick up as investors once again trade risk for yield.

I do not expect that this will be a fast growth story however as the price of the company is still below our intrinsic value of $5.60 and the gross yield is 7%, it is a good long-term story in the blue chip sector.

Given that the price has not moved in line with the recent gains in the market it also will be somewhat resistant to any market pull back.

With the next dividend due of $0.15 in February 2013 the full dividend for the 2013 financial years will be $0.275 up slightly on last year.

With the new rules around Financial Services due to begin on the 01/07/2013 AMP’s size will give it the advantage in the market place.

This is a long-term buy. 

Expect the path to be a little bumpy.  

For more information on AMP Limited (AMP) please contact us on 07 4771 4577.